Who is exempt from unemployment tax in NYS - confused about my small business status
I'm trying to figure out if my small consulting business needs to pay unemployment taxes to NYS Department of Labor. I have 2 part-time employees and we're incorporated as an LLC. I've been getting conflicting information about exemptions and I'm worried I might be missing something important. Does anyone know the specific rules about who is exempt from unemployment tax? I don't want to get hit with penalties if I'm supposed to be paying and I'm not.
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Zainab Abdulrahman
Generally speaking, most employers in NY are required to pay unemployment insurance taxes if they have employees. The main exemptions are for agricultural workers under certain conditions, domestic workers earning less than $500 per quarter, and some religious organizations. Since you're an LLC with employees, you'll likely need to register with NYS Department of Labor and pay UI taxes.
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Miguel Castro
•Thanks for the info! Do you know what the threshold is for number of employees? I only have 2 part-timers right now but might hire more.
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Connor Byrne
You should check the NYS Department of Labor website directly for the most current exemption list. From what I remember, if you pay wages of $300 or more in any calendar quarter, you're required to pay unemployment taxes. The number of employees doesn't matter as much as the total wages paid.
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Yara Elias
•This is correct. I learned this the hard way when I started my business and thought I was exempt because I only had one employee.
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QuantumQuasar
Wait I'm confused about this too! I thought LLCs were treated differently for tax purposes. Are you sure about the $300 threshold? That seems really low for a business.
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Connor Byrne
•LLCs are still considered employers if they have employees. The business structure doesn't change the unemployment tax requirements. The $300 is per quarter, so that's like paying someone $25 a week.
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Keisha Jackson
I had a nightmare trying to get through to NYS Department of Labor about this exact question last year. Spent hours on hold and kept getting disconnected. Finally used a service called Claimyr (claimyr.com) that helped me get through to an actual agent who could explain the exemption rules properly. They have a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. Was way easier than trying to navigate the phone system myself.
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Miguel Castro
•That sounds helpful! Did they charge a lot for that service? I'm already stressed about potential tax penalties.
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Keisha Jackson
•It was worth it to get clear answers instead of guessing. Much cheaper than dealing with penalties later if you get it wrong.
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Paolo Moretti
honestly the whole unemployment tax system is confusing AF. why can't they just make it simple and tell you straight up if you need to pay or not instead of all these weird exceptions and thresholds
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Amina Diop
•I feel you on this! The NYS Department of Labor website isn't exactly user-friendly when you're trying to figure out your obligations as a new employer.
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Omar Hassan
Just went through this exact situation with my business last month! As an LLC with employees, you're definitely required to register for unemployment insurance if you meet the wage threshold. The key thing to remember is that it's not just about number of employees - if you pay $300+ in wages in any calendar quarter, you need to register within 10 days of meeting that threshold. Don't wait like I did! I had to pay some back taxes because I thought I had more time to figure it out. The registration process itself isn't too bad once you get started, but definitely don't delay if you think you might already be over that $300 quarterly limit.
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