Statutory Employees
By statute, officers of corporations are employees. They are the only statutory employees for Unemployment Insurance tax purposes by law. However, certain workers are required to be in the employ of, or under the direct supervision of, a principal who is properly licensed. These workers are usually covered for Unemployment Insurance tax purposes. They generally include:
- Cosmetologists and barbers working in a shop licensed by another individual, excluding workers who have a contiguous shop license and are free from direction and control.
- Well-drilling rig operators and laborers working for Idaho licensed well drillers.
- Guides working under Idaho licensed outfitters.
- Unlicensed real estate appraisers working under licensed real estate appraisers.
- Loan originators working for a mortgage broker.
Casual Labor
Casual labor is defined as work performed that is not in the course of the employer's trade or business which is occasional, incidental, or irregular. Do not confuse casual labor with temporary or part-time employment, which is taxable. If during a calendar quarter the cash remuneration paid to an individual for casual labor is $50 or more or the casual labor is performed by an individual who is regularly employed by the employer on some portion of 24 days during the calendar year, or the preceding calendar quarter, the service is covered employment and remuneration is taxable under Idaho Employment Security Law as described in Idaho Code 72-1316A(19).
Aliens / Resident Aliens / Non-Citizens
Services performed by all workers including aliens, resident aliens, and other noncitizens of the United States must be considered when making unemployment insurance reports. Payments made for such worker's service is generally taxable when coverage criteria is met.
Payments made to temporary alien agricultural laborers permitted to work under the H2 provisions of the Immigration and Reform Control Act of 1986 are not taxable wages. These payments must be used to determine if the coverage criteria for an agricultural employer have been met.
FUTA
Employers and services covered by the Federal Unemployment Tax Act (FUTA) are automatically covered under Idaho State law. However, services that are exempt from FUTA coverage are NOT automatically exempt for the state. To be exempted, the services must be specifically exempted by state statute. Employers are allowed to take the maximum state unemployment tax credit on their federal form 940 if they have paid all state contributions by the due date of the 940 form. For specific questions on the 940 form, contact the IRS.
Contractors / Subcontractors
The Idaho Employment Security Law provides that a principal contractor can be held liable for tax due on wages paid by a subcontractor. No covered employer which contracts with any contractor or subcontractor who is a covered employer shall make final payment to such contractor or subcontractor for any indebtedness due, until after the contractor or subcontractor has paid or has furnished a good and sufficient bond acceptable to the Director of the Idaho Department of Labor for payment of contributions due, or to become due, in respect to personal services which have been performed by individuals for such contractor or subcontractor. Failure to comply with this provision shall render the covered employer directly liable for such contributions; and the director shall have all of the remedies of the law as though the services in question were performed directly for the covered employer.
Employees Performing Services in More Than One State
To be considered covered employment under the Idaho law, the worker must perform the services within this state. Services are considered to be performed or localized within this state:
- If the services are performed entirely within this state.
- Most of his/her services are performed in this state and he/she works outside the State only at temporary or occasional tasks.
If 1 or 2 are not met, the services may still be reportable to Idaho. To determine the proper state to report to for UI tax purposes, contact any Department of Labor tax representative. To find the tax representative nearest you, please consult the Tax Representatives directory.