New Hampshire Payroll Tax Enforcement & Liens
Checklist
Unemployment insurance tax is an employer-paid tax that funds unemployment benefits for workers who lose their jobs. In New Hampshire, employers must pay unemployment
insurance taxes to New Hampshire Employment Security (NHES) every quarter. When
an employer fails to pay unemployment taxes on time, NHES begins collection action.
This can include penalties and interest, tax liens, and other enforcement measures.
Unlike federal payroll taxes, which include employee withholding, the New Hampshire unemployment tax is paid entirely by employers and is not deducted from employees' paychecks. Understanding how the state enforces unemployment tax obligations helps employers recognize warning signs early and understand what happens next in the collection process.
The sooner an employer addresses unpaid unemployment tax debt, the fewer enforcement tools the state typically needs to use. State law requires employers to file quarterly reports and make timely payments to avoid collection actions.
What This Issue Means
Unemployment tax enforcement occurs when an employer owes unpaid unemployment insurance taxes to the New Hampshire Employment Security. This is different from federal payroll taxes (Social Security, Medicare, and federal income tax withholding reported on Form 941) that you remit to the Internal Revenue Service. New Hampshire
does not have state income tax withholding on wages, so employers do not withhold or remit state taxes from employee paychecks.
The unemployment insurance tax is an employer-paid tax based on wages paid to employees. When this debt remains unpaid past the quarterly due date, the state begins a collection process that may include written notices, tax liens against business or personal assets, and other enforcement actions. This tax debt is separate from any obligations to the New Hampshire Department of Revenue Administration, which handles Business Profits Tax and Business Enterprise Tax for business entities.
Why the State Issued This or Requires This
New Hampshire Employment Security collects unemployment insurance taxes quarterly.
Every employer must file a Tax and Wage Report for each calendar quarter in which they provide employment. The tax rate for new employers starts at 2.7% on the first
$14,000 in annual wages paid to each employee.
After the first year, the tax rate adjusts based on the employer's experience rating, ranging from 0.10% to 7.50% for experienced employers. When a report is filed late or payment is not made by the due date, NHES sends notices and begins enforcement procedures. Common triggers for unemployment tax enforcement include missed quarterly payment deadlines, unfiled tax returns, or insufficient payments.
The state does not exercise discretion to enforce; enforcement begins automatically when unemployment tax obligations are not met under the quarterly filing and payment schedule. Statutory requirements require NHES to collect these taxes to maintain the unemployment insurance trust fund that pays benefits to eligible workers.
What Happens If This Is Ignored
If the unpaid unemployment tax debt is not addressed, the state typically escalates collection actions through its debt collection process. The state may file a tax lien against the employer's business assets, bank accounts, or personal property. The state may also pursue wage garnishment, bank account levies, or other collection methods.
Penalties and interest continue to accrue on the unpaid balance at the applicable interest rate set by state law. The longer the debt remains unpaid, the larger the total amount owed becomes. In some cases, the state may refer the matter to outside collection agencies or pursue legal action in Superior Court to collect the debt.
Continued non-compliance can affect your unemployment tax rate and your ability to operate your business in New Hampshire. The state has broad authority under state law to use various collection tools to recover unpaid taxes.
What This Does NOT Mean
An unemployment tax notice does not automatically mean the state has filed a tax lien against your property. A notice of enforcement action does not mean your business license or operator's license will be revoked or that criminal charges will be filed.
Receiving an unemployment tax notice does not mean the debt cannot be resolved or that payment arrangements are impossible.
These are separate enforcement tools that the state may use if the debt is not addressed, but they do not happen all at once. This is also not the same as federal tax problems with the Internal Revenue Service, which are handled separately.
Unemployment tax issues do not involve the New Hampshire Department of Revenue
Administration, which handles different business taxes.
Checklist: What to Do After Receiving an Unemployment
Tax Notice or Identifying This Issue
Step 1: Locate and Review All Unemployment Tax Notices and Documents
Find all written notices from New Hampshire Employment Security about unpaid unemployment insurance taxes. Look for notices titled "Notice of Tax Due," "Demand for
Payment," "Notice of Intent to Lien," or similar language. Keep these documents in one place so the amounts and deadlines are precise.
Note any deadline dates listed in the notices and check whether penalties and interest have been added to the original tax debt. Review assessment information carefully to understand what periods are covered by the outstanding balance.
Step 2: Gather Unemployment Tax Filing and Payment Records
Collect copies of all quarterly Tax and Wage Reports filed in the past 24 months. Collect proof of all unemployment tax payments made to the state (bank statements, cancelled checks, receipts, or online payment confirmations). Gather any correspondence from
NHES about the account (letters, notices, or email messages).
If the business uses a payroll service or security service that handles tax filings, request copies of all filings and payments from that service. Having complete records helps you verify whether unfiled tax returns exist or whether payments were misapplied.
Step 3: Calculate and Confirm the Amount Owed
Add up the unpaid amounts listed in all state notices. Check whether interest and penalties are included in the total amount due. Compare the state's figures to your business records to identify any discrepancies.
If amounts do not match, note the differences clearly and prepare documentation to support your position. Understanding the full scope of your tax debt is essential before contacting the state.
Step 4: Contact New Hampshire Employment Security
Call New Hampshire Employment Security at (603) 228-4042 option 1 to speak with a representative about tax reports, tax rates, or delinquency notices. Have your employer account number and all notices ready when you call. Ask the representative to confirm the exact amount owed, including penalties and interest.
Ask whether the account is currently in enforcement status (tax lien filed, wage garnishment in process, or bank account levy pending). Request information about payment options (full payment, installment payment agreements, or other arrangements). Ask about any available penalty abatement or interest rate reduction programs.
Step 5: Request Payment Plan Options or Explore Resolution Methods
Ask the New Hampshire Employment Security office whether the state offers an installment agreement or payment plan for unpaid unemployment taxes. Inquire about the terms (monthly cost, plan duration, and required documentation). Ask whether the
state offers penalty abatement for reasonable cause or if currently not collectible status is available for businesses facing severe financial hardship.
While New Hampshire does not offer an offer-in-compromise program for unemployment taxes like the Internal Revenue Service does for federal taxes, the state may work with employers who demonstrate good-faith efforts to resolve tax debt. If the state does not offer a payment plan, ask what payment methods are accepted and what happens if full payment cannot be made immediately.
Step 6: Review the Account for Errors or Discrepancies
Ask New Hampshire Employment Security for an itemized statement showing each quarterly unemployment tax obligation and any payments applied. Compare this statement to your own quarterly filing records and payment receipts. If there are missing payments in the state's records that you made, ask how to provide proof of those payments.
If there are filing or payment discrepancies, document them clearly with supporting records. If you believe the tax assessment is incorrect, request a hearing with a hearing officer to dispute the evaluation formally.
Step 7: Prepare Full Payment or Payment Plan Terms
Determine whether the business can pay the full amount owed immediately. If full payment is possible, confirm the payment method (check, electronic transfer, or other option accepted by the state). If full payment is not possible, wait for the state's response on the terms of the installment payment agreement.
Once payment plan terms are offered, review them carefully and confirm in writing that you accept the plan. Make sure you understand the monthly payment amount, duration, and consequences of missing a payment under the installment agreement.
Step 8: Make the Payment or Fulfill Payment Plan Obligations
Submit full payment or the first installment, as agreed with the state. Include the employer account number with the payment to ensure it is applied to your account.
Keep proof of every payment made (receipt, cancelled check, bank confirmation, or email confirmation).
If an installment payment agreement is in place, mark the due dates on a calendar to avoid missing installments. Missing even one payment can restart enforcement action, including potential liens against bank accounts or other assets.
Step 9: Prevent Future Unemployment Tax Issues
Set up a quarterly unemployment tax filing and payment schedule for the business.
Mark all filing deadlines and payment due dates on a calendar or in accounting software to avoid future unfiled tax returns. If using a payroll service, verify that the service files reports and makes payments on time each quarter.
If filing and paying independently, set aside funds each payroll period for taxes due based on your current tax rate. Create a system to track all quarterly filings and payments to maintain compliance and avoid future debt collection actions.
- Missing Notice Deadlines: Ignoring a deadline listed in a state notice can
- Not Responding to State Communications: If the state sends a notice asking
- Incomplete or Inaccurate Payment Information: Sending a payment without
- Allowing Payments to Lapse Under an Installment Agreement: Missing even
- Failing to Keep Unemployment Tax Records: Without copies of filed reports
- Not Verifying That the Debt Is Current: After paying or completing a payment
- State enforcement notices and responses
- Sales tax audits, assessments, and collections
- Payroll & trust fund tax enforcement issues
- Penalty and interest reduction options
- Payment plans and state tax relief eligibility
- Representation before state tax agencies
Step 10: Request Written Confirmation That the Issue Is Resolved
Once the debt is paid in full or a payment plan is completed, request written confirmation from New Hampshire Employment Security that the account is current. Ask whether any tax lien filed against the business, bank accounts, or personal property will be released. Keep this confirmation for business records.
If a lien was filed, verify that the lien release has been properly recorded with the appropriate authorities. This documentation protects your credit and ensures no future complications with property transactions or bank accounts.
What Happens After This Is Completed
Once a payment is made or an installment agreement is established with New
Hampshire Employment Security, the state typically pauses enforcement action temporarily while the arrangement is active. The state monitors whether payments are made on schedule and whether current quarterly obligations are being filed and paid on time. If the payment plan is completed, the state typically sends written confirmation that the unemployment tax obligation has been satisfied.
If a tax lien was filed, the state may file a lien release once the debt is paid and all back taxes are satisfied. However, if payments under a plan are missed, the state may resume or escalate enforcement action, including tax liens, wage garnishment, or bank account levies. Maintaining compliance with both the payment plan and current quarterly obligations is essential to avoid renewed collection actions.
Common Mistakes to Avoid trigger automatic enforcement action (such as a tax lien filing). Always note deadlines and respond before they pass to avoid additional penalties and interest. for information or offering a payment plan, responding promptly prevents the state from assuming the account will not be resolved voluntarily. Ignoring notices accelerates the collection process. the employer account number may cause it to be misapplied to another account or returned. Always include clear account identification with any payment. one payment under an agreed installment payment agreement can restart enforcement action and cancel the payment plan. Mark payment due dates carefully and prioritize these payments. and payments made, it is difficult to dispute state figures or prove compliance if the state's records contain errors. Maintain organized records for at least three years. plan, always request written confirmation from the state that the account is current and that any liens are released. Do not assume the matter is closed without documentation.
Frequently Asked Questions
What is the difference between unemployment tax and federal payroll taxes?
Unemployment insurance tax is an employer-paid tax to the New Hampshire
Employment Security that funds unemployment benefits. Federal payroll taxes include
Social Security, Medicare, and federal income tax withholding reported on Form 941 that you remit to the Internal Revenue Service. These are separate obligations to different agencies.
Can the state file a tax lien without first sending a notice?
New Hampshire typically requires New Hampshire Employment Security to send notices before filing a tax lien. However, once a notice is sent and the deadline passes without payment, the state may file a lien without further notice under the applicable statutes.
How long does an unemployment tax lien stay on file?
Tax liens typically remain until the debt is paid or a release is filed. Contact New
Hampshire Employment Security for specific information about a lien on your account and the process for obtaining a lien release.
Can I dispute the amount the state says I owe?
Yes. You can request an itemized statement from New Hampshire Employment Security and compare it to your records. If discrepancies exist, provide documentation to the state and request a review or hearing.
What happens if I cannot afford to pay the full amount right now?
Contact New Hampshire Employment Security and ask about installment payment agreement options. The state may offer installment arrangements based on your financial situation. If arrangements cannot be made, the state may pursue enforcement action, including tax liens or wage garnishment.
Will paying unemployment taxes stop a tax lien from being filed?
If a tax lien has not yet been filed and payment is made before the state files the lien, the state typically will not file a lien. If a lien has already been filed, paying the debt relief may result in the lien being released once the account is verified as current.
Does New Hampshire offer tax amnesty programs for unemployment taxes?
New Hampshire occasionally offers tax amnesty programs that provide penalty relief for certain taxes. Contact New Hampshire Employment Security to ask whether any current amnesty programs apply to unemployment insurance taxes.
Facing State Tax Enforcement Action?
If you’ve received a notice related to sales tax or payroll tax enforcement and are unsure how to respond, our team can help you understand your options and next steps.
We help with:
20+ years experience • Same-day reviews available
