Who is required to pay unemployment taxes?
In Arizona, most employers are required by law to pay unemployment taxes on the first $7,000 in gross wages paid to each employee in a calendar year. An employer can be an individual, partnership, corporation, limited liability company or any other entity for which a worker performs services. If you meet one of the following conditions, you are an employer required to pay unemployment taxes:
- Pay wages of at least $1,500 during a calendar quarter, or
- Employ at least one worker for some part of a day in each of 20 different weeks in a calendar year, or
- Acquire the business or part of the business of an employer already subject to unemployment taxes, or
- Are required to pay Federal Unemployment Tax because you employed any individuals in any other state or for any other reason, or
- Own or control two or more businesses in Arizona which together meet any of the other conditions described here, or
- Pay domestic/household workers at least $1,000 cash wages in a calendar quarter, or
- Pay agricultural workers at least $20,000 cash wages in a calendar quarter, or employ at least 10 agricultural workers for some part of a day in each of 20 different weeks in a calendar year, or
- Are a nonprofit organization exempt under section 501(c)(3) of the Internal Revenue Code, and employ four or more individuals for some part of a day in each of 20 different weeks in a calendar year, or
- Voluntarily elect to provide unemployment coverage to your workers even though it is not required, or
- Are a leasing or temporary services business which leases or provides workers to other businesses, or
- Are an Indian tribe, or are any subdivision, subsidiary, or business enterprise wholly owned by such Indian tribe.
When you meet one of the above conditions during a calendar year, you must report all gross wages and pay taxes on all taxable wages you paid during that entire calendar year. You must continue paying taxes each subsequent calendar year until your account is terminated.