(1) The department shall advise each claimant filing a new claim for unemployment insurance, at the time of filing the claim, that: (a) Unemployment insurance is subject to federal and Wisconsin income taxes. (b) Requirements exist under federal law pertaining to estimated tax payments. (c) The claimant may elect to have federal income taxes and, if permitted under sub. (3), Wisconsin income taxes withheld and to change each election once during a benefit year. (2) The department shall permit a claimant to elect to have federal income tax deducted and withheld from the claimant’s benefit payments. Except as provided in sub. (5), if a claimant elects federal income tax withholding, the department shall deduct and withhold federal income tax at the rate specified in 26 USC 3402 (p) (2). (3) The department may permit a claimant to elect to have state income tax deducted and withheld from the claimant’s benefit payments. Except as provided in sub. (5), if the department permits and a claimant elects state income tax withholding, the department shall deduct and withhold state income tax at the rate specified by the department. (4) The department shall permit a claimant to change each previously elected withholding status under sub. (2) or (3) one time within a benefit year. (5) If any benefit payment due for a week under s. 108.05 (1) to (7), after making any deductions under s. 108.05 (10), is insufficient to equal the amounts required to be withheld under sub. (2) or (3), the department shall deduct and withhold the entire remaining benefit payment for that week. (6) Upon making a deduction under this section, the department shall transfer the amount deducted from the fund to the federal internal revenue service or to the department of revenue. (7) The department shall follow all procedures specified by the U.S. department of labor and the federal internal revenue service pertaining to the deducting and withholding of income tax.
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