Liable Employer for Texas Unemployment Insurance Tax - FAQs

The Texas Unemployment Compensation Act (TUCA) defines Liable Employers as employers that must pay unemployment taxes.

Note: For more information on Texas state unemployment insurance tax (SUI), visit the Texas Workforce Commission website here.

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How do I know if I am a liable employer?

A Liable Employer is defined by any of the following:

• An employing unit that is liable under the Federal Unemployment Tax Act (FUTA) and has Texas employees.
• An employing unit that pays $1,500 or more in total gross wages in a calendar quarter, or has at least one employee during twenty different weeks in a calendar year regardless of the wages.  The employee does not have to be the same person for twenty weeks.  It is not relevant if the employee is full time or part time.
• An individual or employing unit that acquires or otherwise receives, through any means, all or part of the organization, trade, business, or workforce of another that was a liable employer at the time of the acquisition.
• An employing unit that is a non-profit organization as described under section 501(c) (3) of the IRS code and has four or more employees during 20 different weeks in a calendar year.
• An employing unit that volunteers to become liable even though they do not currently meet the required criteria.
• All political subdivisions of the state of Texas, including municipalities, counties, utility districts, public education institutions, etc.
• An employing unit that paid cash wages of $1,000 or more in a calendar quarter for domestic services.
• An employing unit engaged in farm and ranch labor if:
  • It employs three or more employees for twenty weeks or more in a calendar year, or pays at least $6,250 in total gross wages in a calendar quarter.
  • The service is performed on a truck farm, orchard or vineyard and is performed by a seasonal worker.
  • The worker is a migrant or a seasonal worker who works for a farmer, ranch operator, or labor agent who employs migrant workers.