{"id":8353,"date":"2025-07-28T15:44:39","date_gmt":"2025-07-28T15:44:39","guid":{"rendered":"https:\/\/alvatax.com\/new\/?p=8353"},"modified":"2026-08-13T12:38:45","modified_gmt":"2026-08-13T12:38:45","slug":"template","status":"publish","type":"post","link":"https:\/\/alvatax.com\/?p=8353","title":{"rendered":"MATTERS RELATED TO THE STATE INSURANCE FUND CORPORATION"},"content":{"rendered":"\t\t
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MATTERS RELATED TO THE STATE INSURANCE FUND CORPORATION<\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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By: Carlos R. Gonz\u00e1lez Mart\u00ednez<\/h6>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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In the coming days, a payroll related filing is due that is obligatory for every business.\u00a0 I am referring to the annual payroll declaration that must be filed with the State Insurance Fund Corporation (the \u201cSIF\u201d). The renewal process commenced on July 1st<\/sup>, 2025 and extends through August 15, 2025. A 15-day extension is available if additional time is needed to gather the necessary information to prepare and file the annual payroll statement. This extension can be requested through the SIF portal (www.cfse.pr.com)<\/p>

Herein below, we provide various comments and tips with respect to various aspects of the workmen\u2019s compensation insurance.<\/p>

It is important to comply with this requirement if the company has employees or has contractors working for the business. You should also ensure that other businesses from whom you obtain services, including construction services, are also compliant with these requirements.\u00a0 Failure to do so may expose your business to the potential assessment of unpaid premiums, in case of an audit from the SIF, or to a costly litigation in the case of an injured employee, contractor or employee of your contractor.<\/p>

Every employer is required by law to have an insurance policy with the SIF.\u00a0 This insurance provides the employer with immunity in the event of a workplace accident involving an employee or contractor, eliminating the possibility of a civil lawsuit.\u00a0 To be covered by the workmen\u2019s compensation insurance, employers must consider and report all risks associated with its operations (based on the current Manual of Trade and Industries Classifications and Types of Insurance published every year by the SIF) on its payroll statement and timely pay the corresponding premium.\u00a0 Once an entity is considered an insured employer, the SIF will take care of all medical and rehabilitation costs of the injured employee and will eliminate the exposure to lawsuit costs related to the accident.<\/p>

There are two types of policies: permanent and temporary.\u00a0 The permanent policy is designed for employers that have continuous operations all year-round. This policy must be renewed annually. The temporary policy applies to economic activities that have a limited time duration such as construction projects or special events.<\/p>

For purposes of renewing a permanent policy, the employer must do the following:<\/p>

  1. Prepare and submit the annual payroll statement on or before August 15 (or later if an extension is obtained), including the gross salaries of all employees based on the risks associated with the operations and identifying the locations where the operations occur.\u00a0 Please note that the salaries to be considered must include all types of compensation, whether they are in cash or in kind.\u00a0 Also, in the case there are contractors working without a SIF insurance policy, the employer will need to include those contractor payments in the annual payroll statement and pay the corresponding premium based on the applicable risk.\u00a0 An employer may have multiple risks associated with its operations and can report those risks separately; however, take into consideration that officers, members, administrators and executives whose compensation cannot be specifically classified in any particular risk, must be reported using the main risk of the business, generally the one with the higher insurance premium rate.\u00a0 Also, if during the year there is a change in the operating location or there is a new location, a new endorsement must be requested to the SIF to include the new location in the policy and cover any accident occurring there.\u00a0 In the case of a corporate reorganization, request the SIF to transfer the premium discounts based on the accumulated experience of previous years to the new or surviving entity.\u00a0 If the business has employees working from home, take into consideration that there is a risk rate that covers those salaries and there is additional information that must be provided related to those employees.<\/li><\/ol>
    1. Include copies of other payroll-related quarterly returns. It can be copy of Forms 941 filed with the U.S. Internal Revenue Service, Forms 499 R-1B filed with the Puerto Rico Treasury Department or the State Unemployment Insurance Returns filed with the Department of Labor for the 3rd<\/sup>\u00a0and 4th<\/sup>\u00a0quarters of prior year and the 1st<\/sup>\u00a0and 2nd<\/sup>\u00a0quarters of current year.<\/li><\/ol>
      1. Pay the premium installments notified by the SIF within the time required in the official SIF notice.<\/li><\/ol>

        In the case of temporary policies, the SIF will determine the premium depending on the type of activity or operation the employer or contractor is engaged in and the length of time to be covered.<\/p>

        During an audit, the SIF may request information and documents with the purpose of determining whether the employees\u2019 risks are correctly classified and whether the contracted services were properly covered by their own SIF insurance policy, if not included in your business payroll declaration.\u00a0 Among the information that may be requested are:<\/p>

        1. List and job descriptions of all employees<\/li>
        2. List of officers, members, administrators, executives and supervisors<\/li>
        3. Detailed profit and loss statement, identifying those expenses related to payments for services<\/li>
        4. Copy of the informative returns related to services<\/li>
        5. List of the service suppliers, including a description of the services received, the amount paid, its employer identification number and its SIF policy number<\/li>
        6. Copies of invoices and checks related to the services contracted during the year.<\/li><\/ol>

          ATBA Comments:<\/strong><\/p>

          When preparing this year\u2019s annual payroll statement, be sure to:<\/p>