Delinquency Resolution

Employers who are or may fall behind in filing their UC tax and wage reports and/or in paying their UC obligations should promptly contact the Office of UC Tax Services (UCTS) to address the delinquency or potential for a delinquency.

About UCTS Collections Support

The UCTS Collections Support staff can assist employers in filing outstanding quarterly tax and wage reports and advise of payment options. If an employer cannot pay the balance due in full, a payment plan and/or application for agreement to compromise of interest/penalty may be submitted for review. Addressing delinquencies can save an employer money on future tax liabilities and reduce the likelihood of the consequences mentioned below.

Employers having difficulty meeting their UC tax obligations should immediately contact the UCTS Collections Support staff at 412-565-5121. The phone message will be returned within 2 business days.

If you have a registration delinquency, visit  http://mypath.pa.gov to file a PA Online Business Tax Registration.

Request for Compromise

A compromise is available to employers that have experienced a negative unexpected business event or are experiencing a financial situation that would make it difficult to pay their full Pennsylvania Unemployment Compensation (UC) tax delinquent balance due through a payment plan. 

Employers interested in resolving their PA Unemployment Compensation (UC) tax liabilities through a compromise, must follow these steps:

  1. Pay all Employee Withholding, Employer Contributions, and/or Fees due on the employer account.
    I
    n general, a compromise offer is only accepted for interest and/or penalties due on employer accounts. Payment for Employee Withholding, Employer Contributions, and/or Fees due must be completed prior to submitting the application. There are certain limited situations (bankruptcy, receivership, or decedent estate) where Employee Withholding and Employer Contributions can be considered. Contact the Collections Support Unit at 1-717-772-4421 to discuss those specific situations. 

    Please refer to your UC Tax Employer account for current balances due through your employer self-service portal at www.uctax.pa.gov

  2. Request an application from the Department.

    Submit an inquiry to UCTS online at UC Tax Inquiry

    Or

    Contact the UCTS Collections Support staff 1-717-772-4421 

  3. Complete the application in full and submit the applicable compromise payment.
    The Department will send you an “Application for Agreement to Compromise”. The application contains additional instructions and guidelines to follow to complete the application for the compromise.

    The compromise application can be sent either electronically or on paper.

    Please indicate to staff how you would like to receive the application. Additional assistance can be provided from Department staff on how to complete the application. 

    Electronic Compromise Applications: 
    You will receive an “Application for Agreement to Compromise” email. The compromise application and compromise payment will be completed through your employer self-service portal at www.uctax.pa.gov.

    Paper Compromise Applications:
    The paper compromise application will be emailed directly from UCTS Staff or mailed to your address. Return the paper application to the Department representative who provided it to you or mail to:

    Office of Tax Services
    P.O. Box 60848
    Harrisburg, PA 17106-0848 

  4. Submit the Compromise Payment
    The compromise payment should be made through your employer self-service portal at www.uctax.pa.gov

A Few Compromise Tips

The compromise process with UCTS is not a back-and-forth negotiation. The Department expects that you are offering your best compromise amount from the start.  

The compromise offer payment is not refundable if the compromise is denied and will be applied to the account balance.  

Department employees are not permitted to give advice or suggestions about how much to offer.

A compromise dependent on other factors (such as the completion of a payment plan) will not be accepted. 

A letter citing the reasons for your request for compromise must be attached with the application. 

In general, Employee Withholding, Employer Contributions, and Fees must be paid in full prior to submitting this application. However, there are certain limited situations (bankruptcy, receivership, or decedent estate) where Employee Withholding and Employer Contributions can be considered. 

Consequences of Failing to Address Delinquencies

Delinquent employers are assigned a delinquency contribution rate that is 3 percent higher than the rate which they would otherwise be assigned. The 3 percent delinquency rate factor is assigned to employers who fail or refuse to:

  • file all required registration documents; and/or
  • file all required quarterly UC tax reports; and/or
  • pay all contributions, interest, and/or penalties due through the second quarter of the year prior to the calendar year for which the contribution rate is being calculated.

The delinquency contribution rate assigned to delinquent employers is adjusted by the solvency measures applicable to the particular year. The delinquency contribution rate is the sum of the Basic Rate (Reserve Ratio Factor + Benefit Ratio Factor + State Adjustment Factor) + 3 percent (3%) + the Solvency Measures (Surcharge Adjustment + Additional Contributions + Interest Factor, if applicable).

Full payment of a delinquent balance or entering into a payment plan can save an employer approximately $300 per year per employee depending on the solvency measures in effect.

​Late Filing Interest and Penalty: Interest charges on delinquent contributions and penalty charges on delinquent reports are separate and distinct. If you are unable to pay a quarterly report in full on the due date, you can avoid penalty charges if the report is filed on time. An employer who fails to file its UC Quarterly Tax Report when due must pay a penalty of 15 percent of the total amount of contributions due, with a minimum of $125 and a maximum of $450.

Interest charges will continue to accrue on any unpaid contributions balance until it is paid in full. The interest rate is set annually by the Secretary of Revenue, unless it is less than the 12 percent minimum established beginning with the calendar year 2018.

Non-Compliance Filing Penalty: Employers are required to electronically file quarterly UC tax and wage reports through the Unemployment Compensation Management System (UCMS). Employers who are unable to comply with the electronic filing requirement must file a waiver request form. Employers without a Department-approved waiver whose reports are not filed electronically will be charged a penalty equal to 15 percent of the total contributions payable, with a minimum of $125 and a maximum of $450. 

Non-Compliance Payment Penalty: Payments of contributions, reimbursement of benefit charges, interest, and/or penalties are required to be paid electronically through UCMS if the total liability for a payment period is, or at any point was, $5,000 or more, and the employer does not have a Department-approved waiver on file. Failure to make payment electronically will result in a penalty equal to the greater of $25 or 10 percent of the remittance amount, up to a maximum of $500.

Dishonored Remittance Penalty: A penalty is charged to anyone who provides a check or payment by electronic transfer to the Department of Labor & Industry that is subsequently dishonored by the financial institution upon which it is drawn. The dishonored remittance penalty is 10 percent of the remittance amount, up to a maximum of $1,000, with a minimum of $25 per occurrence.

 

​Failure to timely file UC tax and wage reports results in missing wage information for employees who file for UC benefits.  This results in additional work and delays for both employers and former employees.

​Payment of state UC taxes when due will maximize the employer's Federal Unemployment Tax (FUTA) credit on its federal tax returns. If an employer pays its state UC taxes for prior years on or before February 10th, it is entitled to a credit of 5.4 percent against the FUTA tax, which is usually 6.0 percent of the first $7,000 of each employee's annual wages. Any questions about FUTA should be addressed to the Internal Revenue Service.

​Under section 304 of the PA UC Law, UCTS may issue a Notice of Assessment to an employer to establish liability for amounts believed due.

​Failure to pay UC tax obligations can result in the filing of liens against the employer and officers and agents of the employer. A lien secures UCTS' interest in an employer's assets when tax debt is not paid. Additionally, as a result of Executive Order 2021-06, Worker Protection and Investment, dated October 21, 2021, the liened delinquency information may be subject to posting on the Department of Labor and Industry's Non-Compliance Lists.

 

​A Writ of Execution is a legal process initiated through the county court system and filed with the county sheriff to attach assets or property covered by a lien.

When an employer fails to make full payment to the PA UC Fund, UCTS may issue a Writ of Execution against assets held indirectly through third parties such as bank accounts and accounts receivable. A sheriff's sale could also be scheduled as a result of a Writ of Execution.  A sheriff's sale liquidates property covered by a lien.  This could include real estate, inventory, equipment, vehicles, or other assets.

​Willful failure to comply to file UC tax reports and pay UC contributions can result in criminal prosecution under Section 802 of the PA UC Law.

​Federal Law permits states to recover certain UC debts from federal income tax refunds under the Treasury Offset Program (TOP), which is administered by the United States Department of the Treasury.

​An injunction is a judicial order that restrains a person or business from continuing to operate. Under PA UC Law, the Department may seek judgment from the courts to stop employers from continuing to do business in Pennsylvania.

If your UC account is not in compliance, you may experience delays renewing licenses or receiving contracts/payment from the Commonwealth until a clearance certificate has been issued.