The following entities do not need to register for a Minnesota Unemployment Insurance Employer Account: • sole proprietorships whose only employees are the spouse, parents, and/or minor children of the sole proprietor, or; • corporations and LLCs whose only employees are owner/officers who directly or indirectly own 25 percent or more of the business and have not chosen to be covered under the Minnesota Unemployment Insurance Program, or; • partnerships whose only workers are the partners of the partnership. Acquisitions When an employer acquires all or part of a business that was required to pay unemployment insurance taxes in Minnesota, that transaction can affect the acquiring employer’s UI tax rate. Depending on the circumstances, taxable wages and benefits paid charges associated with the predecessor employer’s Unemployment Insurance account may be transferred to the successor employer’s Unemployment Insurance account. This transfer is effective the date of the acquisition or merger; the Minnesota Unemployment Insurance (UI) Program will then recalculate the successor’s tax rate effective the first day of the calendar quarter following the effective date of the transfer. Tax Rates Visit Minnesota Unemployment Insurance Program, Wages & Taxes for details on Unemployment Insurance tax rate calculations. New employers The tax rate for new employers is based on the average tax rate for the employer’s industry. This ensures that each new employer has a rate that aligns with other businesses in their industry. Industries are defined by the North American Industry Classification System (NAICS). Experience rating Experience rating assigns an unemployment insurance tax rate (experience rate) to employers who have paid covered wages for a sufficient period to rate their experience with unemployment insurance. The less unemployment that an employer's workers have experienced, the lower the unemployment insurance tax rate will be. By relating tax rates to taxable wages and benefits paid charges, experience rating causes each employer to pay at a rate that covers the cost of the unemployment for which the employer is responsible. Experience rates are computed to the nearest one-hundredth of a percent, to a
maximum of 8.90 percent. Experience Rating Period
The history of taxable wages and benefits paid charges assigned over a prior 48-month period is used to calculate an employer's experience rate. This is called the experience rating period. It
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