General test. Virtually all employers must pay federal and state unemployment tax. Employers pay the federal tax if, during the current or preceding year, they:
• Paid wages of $1,500 or more in any calendar quarter; or
• Employed one person for some part of the day during any 20 weeks of the year (26 U.S.C. Sec. 3306).
Agricultural employers and employers of domestic workers have different tests for liability.
Domestic employers test. Employers of domestic employees must pay state and federal unemployment taxes if they pay cash wages to household workers totaling $1,000 or more in any calendar quarter of the current or preceding year (26 U.S.C. Sec. 3306). A household employee is an employee who performs household work in a private home, local college club, or local fraternity or sorority chapter.
Agricultural employers test. Employers must pay federal unemployment taxes if (1) they pay employees cash wages of $20,000 or more in any calendar quarter, or (2) in each of 20 different calendar weeks in the current or preceding calendar year there was at least 1 day in which they had 10 or more employees performing service in agricultural labor (26 U.S.C. Sec. 3306). ...