The Unemployment Tax program collects wage information and unemployment taxes from employers subject to the Texas Unemployment Compensation Act (TUCA). The taxes support the state’s Unemployment Compensation Fund (UCF). The UCF is a reserve from which unemployment benefits are paid. Unemployment benefits are paid to eligible workers who are unemployed. Unemployment taxes are not deducted from employee wages.
Most employers are required to pay Unemployment Insurance (UI) tax under certain circumstances. The Texas Workforce Commission (TWC) uses three employment categories: regular, domestic and agricultural. Employer tax liability differs for each type of employment. For more information, see Definition & Types of Employment.
Liable employers must register with TWC to create a tax account. The first $9,000 paid to an employee by an employer during a calendar year is taxable. Liable employers must file quarterly wage reports and make quarterly tax payments. Reports and payments are due by the last day of the month following the end of the calendar quarter. For detailed information visit: Reporting & Determining Taxable Wages, Employer’s Quarterly Wage Report Filing Options and Payment Options for Unemployment Tax.
See Domestic Employment for information about unemployment tax and domestic employee wages. This includes information for domestic employer registration requirements and reporting and paying options.
TUCA defines which employers must report employee wages and pay unemployment taxes. We refer to them as “liable employers.”
There are different criteria outlined in TUCA used to determine an employer's liability. They can be found at Determine Whether You Need to Establish an Unemployment Tax Account.
Employers should register with TWC within 10 days of becoming liable.
Employment is any service performed for payment or compensation. This definition includes any hiring contract, whether written, oral or implied. The three elements to the definition are service, wages, and direction and control.
For more information about types of employment, see Definition & Types of Employment. This page also explains the difference between an employee and an independent contractor.
TUCA applies to services individuals perform for wages, unless TWC deems otherwise. If you are uncertain whether the TUCA applies for you, contact the TWC Tax Department.
Wages are the compensation provided to someone in exchange for services or labor. This includes hourly or salary income earned. It also includes back pay, tips, taxable reimbursements, severance pay and commissions.
Federal Unemployment Tax Act, 26 U.S.C. Section 3301 defines wages considered in the calculation of taxes. There are certain exceptions to the term "wages" which are listed in chapter 201 of the TUCA.
To learn which wages are reportable and how to report those wages, visit Reporting & Determining Taxable Wages.
Each month, the Tax Department provides useful hints, shortcuts, or helpful information to employers about Unemployment Tax and Unemployment Tax Internet applications.
May 2025
Unemployment Tax Services (UTS) – User ID’s
User ID’s and passwords function as security for your account. When signing up for a User ID, create a User Id and password that you will remember. Protect your User ID and Password combination and do not share your password with others. The User ID and password combination will be required to ‘open’ your access to UTS each time you log on.
If you file reports for more than one employer, you only need one valid User ID/password combination.
- log on to Unemployment Tax Services,
- select Request Employer Access for each account you would like to add to your list of employers.
Then, when you log on to UTS you simply select the employer account you need by choosing from My Employers.
If you have trouble accessing UTS please be aware that both a Forgot Password and Forgot User ID are available for your assistance.
If you are unable to use Forgot Password or Forgot User ID, please contact us via Contract Request Form
April 2025
Unemployment Tax Services – Self Reset Your Password
Unemployment Tax Services offers a self-reset password process for users who have either forgotten or revoked their password.
Forgotten Passwords
- Select the Forgot Password link from the Logon page.
- Enter the User ID and Name.
- Enter the Security Answer.
- Enter and retype the new Password.
Revoked Passwords
The Reset Password program is automatically invoked when the user revokes their password or fails to correctly answer their security question after two attempts.
- Enter and retype the new Password on the Reset Password page.
- Click the link provided in the email message that has been sent to your email address on file.
- Enter your User ID and new Password on the Finish Password Reset page to finalize the reset process
For assistance with resetting your password, please contact us via Contract Request Form.
March 2025
Business Changes
It is important that TWC be notified of any change in your business. By doing so you can:
- avoid penalties for failure to maintain or submit required reports,
- enable TWC to make a prompt ruling on the unemployment tax rate in the event of a merger, acquisition or other change in ownership, and
- minimize the risks of unusual problems with your account.
Changes to the makeup of your business or a change in address can be reported to TWC by:
- updating your account in Unemployment Tax Services (select the Account Info tab),
- or contacting us via Contract Request Form.
February 2025
Unemployment Tax Services – User Profile Email Address
Registered users of Unemployment Tax Services, the free Texas Workforce Commission (TWC) online system, should update their profile any time they change their e-mail address. Maintaining an updated e-mail address allows you to reset your password by e-mail instead of having to call for assistance. TWC also uses the e-mail address as a means of communicating with employers.
Updating a profile is quick and easy. After logging in to Unemployment Tax Services, select the “My Profile” link from the upper right hand corner of any page. Next, enter the new e-mail address and then submit.
January 2025
2025 Employer Tax Rates are now available online.
You can view your tax rate and obtain a copy of your tax rate notice using Unemployment Tax Services (UTS). A notice will be mailed to the address on record if you are not subscribed to electronic correspondence.
To view your tax rate:
- Log on to your account in the UTS system.
- Select the Account Info tab at the top of the page.
- Select the Tax Rate Summary link on the Quick Links menu to view your tax rate information for the last several years.
To obtain a copy of your tax rate notice:
- Log on to your account in the UTS system.
- Select the eCorres tab at the top of the page.
- Select View PDF on the Action column for the Rate Notice you wish to view.
If you cannot obtain a copy of your tax rate notice on UTS:
- Submit a Contact Request. From the Employer menu, select:
- Reason for Contact: Employer Tax Account Actions/ Issues
- Issue that you are having: Request Employer Tax Rate Statements
Did you know you can sign up for Electronic Correspondence to receive important tax notices via email? Electronic Correspondence (eCorres) allows employers to receive most tax correspondence electronically instead of by mail. All you need to do is subscribe using UTS. For more information on ECorres, please visit: Manage a Tax Account
December 2024
Tax rates for 2025 experienced-rated employers will begin to be mailed early January 2025.
If you use a bookkeeper, accountant, or payroll service, please forward them a copy of this notice. They will require this information to accurately calculate your 2025 taxes.
For additional rate information, please visit: Tax Rates
November 2024
Employer Posters (No Charge)
Texas Workforce Commission (TWC) required and optional posters are available through the website free of charge at: Posters for the Workplace.
Employers are able to print and post copies of the online posters. Government-issued posters do not have to be laminated to satisfy an employer’s regulatory obligation.
Employers do not need to purchase these posters from private vendors; they are always free of charge. Employers should disregard a vendor who implies that they are out of compliance with state law and who urges them to purchase posters.
You can get help if you're confused about which posters are required. Please Call Texas Workforce Commission's (TWC) Wage and Hour department at 800-832-9243.
October 2024
The Myth of Contract Labor
A big problem for a business is when a competing company mislabels workers. They have an unfair edge by lowering their costs because they do not pay the taxes they should on these workers' wages. These companies not only gain a competitive advantage. they also raise the unemployment tax rates for all other employers.
Texas law presumes that workers are employees unless the business can show otherwise. If you misclassify your employees as independent contractors. There could be a result in more costs. Costs would include increased taxes, penalties, and interest charges.
An employee (W-2) is someone over whose work for an employer that exercises direction or control. Employers have extensive wage reporting and tax responsibility. An independent contractor (1099) is self-employed. They bear responsibility for his or her own taxes and expenses. They are not subject to an employer's direction and control.
Please use the attached link to review how TWC Tax classifies workers.
Classifying Employees & Independent Contractors
September 2024
Confidentiality of Information
Texas Workforce Commission (TWC) Tax personnel may deem it necessary to examine records. This could include both hardcopy and/or computer. Staff only review during their official duties.
Section 301.081 of the Texas Unemployment Compensation Act grants TWC the authority to review records. TWC Rules, Section 815.106 Records of Employing Units also addresses this.
Information obtained from an examination of any records is for official TWC business only. Information is kept in strict confidence. TWC staff must ensure the security of personally identifiable and other sensitive information. Staff must maintain such information under TWC standards and security measures. Employer information in not released unless complies with TWC's open records policies.
Additional information can be found at: Texas Unemployment Compensation Act (TUCA or TWC Rules
August 2024
Where Should I Report My Workers
The Unemployment (UI) Tax program collects wage information and unemployment taxes from employers. All 50 states and the territories maintain separate and unique UI Systems.
The wage information is reported by employers. Then used to determine the amount of unemployment benefits claimants may receive. Unemployment taxes support the Unemployment Compensation Fund. Unemployment benefits are paid from the fund.
Employers with employees located in different states or employees who move between states. There is a need to determine where wages should be reported.
The Texas Workforce Commission (TWC) Tax Department has developed a checklist. It is used to assist commission staff and employers. It helps determine on where wages should be reported. You can find the check list at:
Location of Services Checklist
July 2024
Close My Account
If an employer has an active tax account with the Texas Workforce Commission (TWC), they must file a report each quarter even if no wages were paid in the quarter. TWC has no way of knowing that an employer no longer has employment until they close their tax account.
Employers with access to their account through our on-line Unemployment Tax Service (UTS) system, will find it fast and easy to enter the closing information at Unemployment Tax Services.
Log in to your account in the UTS system, and then click on the Account Info tab at the top of the page. Then click on the Update/Close Tax Account option in the Quick Link box.
If you do start having Texas employment again in the future, you can reopen a closed account for a period of three years from the last quarter you reported wages.
If you have problems closing your account through our UTS system, please take the following actions:
Go to the Contract Request Form.
Complete the General Information section
Under Contact Details:
- Reason For Contact: Employer Tax Account Actions/Issues
- Issue that you are having: Need to Close Account
Provide additional required information.
Please note that TWC does not accept requests “on behalf of”. Requests will need to be received from an officer/owner of the company.
June 2024
Written Authorization (POA) – online required.
Texas Employers are required to report Unemployment Insurance (UI) wages and pay quarterly UI taxes electronically, as set forth in Texas Workforce Commission (TWC) Rules 815.107 and 815.109.
Employers who want to authorize a third party to representative them must grant written authorization to that third party electronically through the TWC UI tax employer portal, Unemployment Tax Services (UTS).
A corporate officer or owner will need to have a User ID to log onto TWC’s Unemployment Tax Services (UTS) portal and complete the C-42 form electronically via DocuSign to grant permission to third parties, who may act on their behalf regarding account matters.
The TWC Employer UTS Portal can be found at: Unemployment Tax Services
Use the following steps to submit the C-42 (Written Authorization):
- Corporate officer or owner of employer account should logon with their User ID
- Select “Account Info”
- Select “Third Party Authorizations”
- Select “Complete C-42 Authorization”
- Complete DocuSign process
TWC does not accept Written Authorization to Represent Employing Unit (Form C-42) in paper form unless the only corporate officer is not located in the United States, or a hardship waiver is on file. If necessary, please go to the Employer Contact Request page to request a paper document at: Contact Request Form
** Third Parties may not submit the C-42 authorization through the Unemployment Tax Portal. The owner, corporate officer, etc. must complete the C-42 through Unemployment Tax Services portal. **