Unemployment benefit chargebacks are amounts of paid unemployment benefits charged to an employer’s tax account for use in calculating the employer’s unemployment tax rate. A chargeback is the total amount of regular unemployment benefits (plus 50 percent of extended benefits, if applicable) paid to a claimant and charged to the base-period employers’ tax accounts. If there are multiple base period employers, the amount of each employer’s chargeback is based on the base period wages it paid.
Chargebacks are not money you owe unless you have chosen to be a reimbursing employer. For information on reimbursing employers and protecting your account from reimbursements, see Wage Verification Notice, Reimbursing Employers.
Chargeback amounts are benefits actually paid. If claimants do not collect all of the benefits they qualify to receive, the benefits not drawn are not charged to your tax account.
Notice of Maximum Potential Chargeback
Find out what this notice is, how to respond to it, how to appeal a TWC decision, and how to designate an address.
After a claimant receives their first benefit payment, TWC mails a Notice of Maximum Potential Chargeback to their base-period taxed employers, except the last employer, showing the maximum amount of benefits TWC may potentially charge to the employer’s account.
The Notice of Maximum Potential Chargeback asks base-period employers to give the reason for the claimant’s separation so we can evaluate whether to charge the employer’s tax account for benefits paid to the claimant.
If you disagree with the chargeback amount, you must respond within 30 calendar days of the mail date listed on the notice. Log on to Employer Benefits Services (EBS) and navigate to the Other Services Information page or follow the instructions on the notice.
TWC will send a Charge Liability Decision regarding your chargeback amount response via mail or email to your secure electronic correspondence inbox. If you disagree with TWC’s decision, you can appeal online through EBS.
If you do not respond to the Notice of Maximum Potential Chargeback, you will be charged as shown.
We do not mail the Notice of Maximum Potential Chargeback to the last employer. If you are the claimant’s most recent employer, we send you a Notice of Application for Unemployment Benefits and if you respond to that notice, we send you a determination that includes your appeal rights chargeback information. You do not have further rights to protest the chargeback except in cases of clerical or machine errors that affect the potential chargeback shown on the Wage Verification Notice.
If you are the claimant’s last employer on a claim, and the person separated because of misconduct or quit without good cause connected with the work, you may be exempt from paying reimbursements for benefits paid. TWC will send you an Employer Notice of Unemployment Claim and if you respond timely to that notice, we will send you a decision that advises whether you will be billed for any benefits paid. If you disagree with the decision, you can file an appeal online.
If you are not the claimant’s last employer, and TWC used wages from your company to calculate and pay benefits, we will send you a Wage Verification Notice. If the person separated because of misconduct or quit without good cause connected with the work, you can file an appeal to the reimbursements. The wage verification notice includes the instructions to file an appeal online.
If you disagree with the chargeback amount stated on the notice, you must respond within 30 calendar days from the mail date listed on the notice and provide information to prevent the chargeback to your account.
Responding to Chargebacks Through TWC’s Employer Benefits Services Portal
TWC encourages employers to respond to the Notice of Potential Chargeback through the Other Services feature on the Employer Benefits Services (EBS) portal. Responding to a Notice of Maximum Potential Chargeback through the EBS portal allows employers to view, respond to, and submit the notices electronically.
This online feature provides 24/7 access to the online Other Services site, security, immediate updates and changes, and checks and balances – validation so errors are caught and corrected immediately.
To protest a Chargeback, an employer must do so within 30 calendar days of the date the notice was mailed. If the employer does not respond to the Notice of Maximum Potential Chargeback, they will be charged.
Note: Filing timely is critical to avoid charges and utilizing the EBS portal can prevent mail delays.
Responding to the Notice of Potential Chargeback protects the employer’s tax rate and ensures that benefits are properly paid to claimants. By responding timely, employers ensure the right to appeal a Chargeback.
To respond a Notice of Maximum potential Chargeback electronically:
- Log on to EBS.
- Select the Other Services tab.
- Select Maximum Potential Chargeback Notice from the Quick Links menu.
- Enter the Social Security number (SSN) from the Chargeback Response: Getting Started page.
- Select Next.
You can also respond to a chargeback notice by completing the back of the form and faxing or mailing it to TWC. The back of the notice allows you to provide the reason the claimant is no longer working for you.
Texas Workforce Commission
Chargeback Determination Unit
P.O. Box 149137
Austin, TX 78714-9137
When we make a decision on your chargeback response, we mail you a Charge Liability Decision. That decision shows whether the claimant’s benefits are chargeable to your account.
You have 14 calendar days after the mailing date listed on the decision to submit a timely appeal. See our Appeals Process for Employers webpage.
Texas law allows Texas employers with a Texas Workforce Commission (TWC) tax account number to designate mailing addresses for unemployment claim notices and/or chargeback notices.
Using a designated address allows you to receive unemployment and chargeback notices at one specified location.
For more information, see Designate an Employer Mailing Address
Texas Workforce Commission collects personal information entered into electronic forms on this Internet site. For more information on your rights to request, review and correct information submitted on our electronic forms, see our Laws, Rules & Policy webpage.