(1) Payments are applied to unemployment insurance liabilities as provided in the following order unless bankruptcy proceedings or the department have determined otherwise:

(a) contributions;

(b) administrative fund tax;

(c) interest; then

(d) penalty.

(2) Payments submitted with quarterly reports or payment transmittal forms are applied to that quarter and any overpayment is applied to amounts due in other quarters, beginning with the oldest quarter.  Any remaining overpayment may only be applied to future unemployment insurance tax obligations or refunded to the employer.

(a) The employer may request that payments be applied to a more recent quarter.