Tax Basics
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.
January 2026
Annual Domestic Reporting
February 2, 2026, is the due date for annual filers to submit their 2025 tax reports.
The Texas Workforce Commission (TWC) encourages Annual Domestic Filers to file their annual report and pay the tax due online. This can be accessed through the free online service: Unemployment Tax Services (UTS) System.
To access the UTS system, please visit our website at: Unemployment Tax Services
December 2025
2026 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
October 2025
The Texas Workforce Commission (TWC) Tax Department has to check the records of at least 1% of all Texas businesses that pay taxes. This is required by a Federal Regulation.
Businesses are chosen for these checks, called audits, in two ways:
- The TWC's computer system randomly picks them.
- The TWC chooses them if there's a problem with their tax account.
If your business is chosen for a tax audit, the TWC will let you know by email or letter.
Another way to see if you’re getting an audit is to log in to the TWC's Unemployment Tax Services (UTS).
On your "My Home" page, you might see a message that says: "The Employer Tax Account has been scheduled for an audit and will receive written notification." This means you'll get a letter about the audit.
For more information about TWC tax audits for businesses, visit: Unemployment Insurance Employer Tax Audits.
If you have any other questions or problems, please contact the TWC through their online system here: Contract Request Form
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.