Monthly Archives

December 2020

Indiana Unemployment Tax Rates Hold Steady for 2021

The Indiana Department of Workforce Development has stated that the range of unemployment tax rates for 2021 will remain unchanged from 2020.

Effective January 1, 2021, unemployment tax rates are to range from 0.50% to 3.80% for positive-rated employers and from 4.90% to 7.40% for negative-rated employers. A solvency surcharge is not to be in effect for 2021.

The new employer unemployment tax rate will remain at 2.50% in 2021, unchanged from 2020.

The tax rate for new construction employers also is to be 2.50%, down from 2.53% for 2020.

Indiana’s unemployment taxable wage base is to be $9,500 for 2021, unchanged from 2020.

As always, if there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.

Montana Unemployment Tax Rates Hold Steady for 2021

The Montana Department of Labor has announced that unemployment tax rates are not to change for 2021.

Effective January 1, 2021, unemployment tax rates for experience-rated employers are to be determined with Schedule 1, with tax rate ranging from 0.13% to 1.60% for positive-rated employers and from 3.10% to 6.30% for negative-rated employers. These rates include the Administrative Fund Tax attributable to all employers; 0.13% for positive-rated employers and 0.18% for negative-rated employers.

Montana’s unemployment taxable wage base is to be $35,300 in 2021, up from $34,100 in 2020.

As always, if there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.

Arizona Unemployment Tax Rates Set to Rise in 2021

The Arizona Department of Economic Security announced that employers should expect unemployment tax rates to be higher in 2021 than in 2020.

Effective January 1, 2021, unemployment tax rates will range from 0.08% to 10.30% for positive-rated employers and from 10.87% to 20.60% for negative-rated employers. In comparison, tax rates in 2020 ranged from 0.05% to 6.42% for positive-rated employers and from 6.78% to 12.85% for negative-rated employers.

The tax rate for new employers is 2.00% for 2021, unchanged from 2020.

Arizona’s unemployment taxable wage base is $7,000 for 2021, unchanged from 2020.

As always, if there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.

Missouri’s 2021 Minimum Wage Requirement

The state of Missouri advises that their minimum wage rate will be $10.30 per hour effective January 1, 2021.

Pursuant to Proposition B, which was approved by Missouri on November 6, 2018, the minimum wage will increase 85 cents per hour each year through 2023. Missouri requires all private businesses to pay, at a minimum, the $10.30 hourly rate. Retail and service businesses whose gross annual sales are less than $500,000 are the exception to this requirement. Compensation for tipped associates, however, must total at least $10.30 per hour. Employers are required to pay tipped associates at least 50 percent of the minimum wage, plus any amount necessary to bring an associate’s total compensation to a minimum of $10.30 per hour. Missouri’s minimum wage law does not apply to public employers, nor does it allow the state’s minimum wage to be lower than the federal minimum wage rate.

For more information about the minimum wage requirements and for downloadable a copy of the updated poster, visit labor.mo.gov/DLS/MinimumWage. A printable version of the poster, along with other required posters for businesses, can be found at labor.mo.gov/posters.

“Congress Passes $900 Billion in Pandemic Relief Package”

On December 21, 2020, Congress passed the second-largest economic rescue package in American history surpassing the $787 billion stimulus package passed in response to the financial crisis in 2009. This comes just behind the $1.8 trillion virus relief package that was signed into law earlier this year. The pandemic relief in conjunction with the omnibus spending bill totals more than $2.3 trillion and the vast package includes many tax benefits and provisions, energy provisions, national security provisions, and COVID-19 crisis related assistance.

As part of the Consolidated Appropriations Act, the “Continued Assistance for Unemployed Workers Act of 2021” bill language includes the extension of the CARES Act unemployment insurance provisions, specifically the Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) programs until March 14, 2021. This bill provides an additional $300 per week in unemployment benefits for the next eleven weeks under the Federal Pandemic Unemployment Compensation (FPUC) program, extends the number of weeks of benefits an otherwise eligible individual may receive from 39 weeks to 50 weeks, and extends the funding of the first week of compensable regular unemployment for those states with no waiting week provision. The Families First Act received full federal funding of extended unemployment compensation and allows for short-time compensation under a short-time compensation program, plus financing, which was also extended to March 14, 2020.

In regard to tax provisions, the legislation provided a five-year extension of the Work Opportunity Tax Credit program through 2025, a five-year extension of Empowerment Zones through 2025, and a one-year extension of the Indian Employment Credit. Disaster Relief for 2020 through sixty days after date of enactment includes a tax credits of 40% of $6,000 in wages and this credit applies to wages paid regardless of whether services associated with those wages were performed.

The legislation provides for $22,318,000 from the Trust Fund to be allocated to the national activities of the Employment Service, including the administration of the Work Opportunity Tax Credit, which includes assisting State Workforce Agencies in adopting or modernizing information technology for use in the processing of certification requests and the provision of technical assistance and staff training under the Wagner-Peyser Act.

The package also includes an extended and enhanced Employment Retention Tax Credit (ERTC) that increases the credit from 50% to 70%, allows a credit against $10,000 for each quarter vs only one quarter, and increases the 100-employee delineation from 100 to 500. Employers who also qualified for Paycheck Protection Program (PPP) loans may still qualify for ERTC with respect to wages that are not paid for with forgiven PPP proceeds, as well as other changes.

The Paycheck Protection Program created in the Cares Act received an additional $284 billion as part of the package and allows loans to be fully forgiven if companies keep employees on their payroll. The legislation states that business owners can write off expenses paid for with forgiven PPP loans, which gives small companies a tax break that could amount to more than $100 billion.

Although many lawmakers supported larger stimulus payments, they were able to agree on a one-time direct stimulus payment of $600 to individuals and $600 per child. The payments are not eligible for those individuals making more than $75,000 or couples making $150,000 and these payments could begin processing as soon as next week. These will be distributed in the same fashion of the previous stimulus bill payments earlier in the year.

The legislation calls for other changes to the earned income tax credit and child tax credit to make it available to those who lost wages or jobs during the pandemic and expanded the Low-Income Housing Tax Credit increase construction of housing for low-wage families. Other tax impacts include an excise tax break for beer brewers, wine makers, and distillers and additional tax credits to help business in low-income communities.

The package includes many more measures such as $69 billion for the distribution of a coronavirus vaccine and more than $22 billion for states to conduct testing, tracing, and mitigation programs. It also provides $13 billion in nutrition assistance, $7 billion for broadband access, $45 billion for transportation and transit agencies, $82 billion in education funding, $25 billion in rental assistance, etc. and is expected to be signed later today by President Trump.

As always, if there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.

Washington Unemployment Tax Rates Set to Rise in 2021

Washington’s unemployment tax rates for experience-rated employers are set to rise in 2021, though legislative action later may provide tax relief.

Effective January 1, 2021, unemployment tax rates for experience-rated employers are to range from 0.52% to 6.02%, compared with 0.13% to 5.72% in 2020. The rates include social cost tax rates ranging from 0.49% to 1.46% and an employment administration fund (EAF) tax rate of 0.03%.

New employers are to be assessed an unemployment tax rate generally equal to 115%, up from 90% in 2020, of the applicable average unemployment tax rate for employers in their industry category.

A solvency surcharge is not to be in effect for 2021, as the surcharge was waived under a proclamation (20-81) signed December 17, 2021 by Governor Jay Inslee.

Washington’s unemployment taxable wage base is to be $56,500 in 2021, up from $52,700 in 2020.

Unemployment tax rates may be lowered under measures proposed by Governor Inslee. Under the proposed relief measures, employers would be relieved of charges for unemployment benefits paid from March 22, 2020 to May 2, 2020.

Additionally, the flat social cost tax rate would decrease to 0.50% from 1.22% for 2021, then gradually increase annually to 0.90% in 2025. The solvency tax would be suspended from 2021 to 2025.

The measures would cause the average unemployment tax rate to be 1.17% for 2021. The average unemployment tax rate otherwise is projected to be 1.88% for 2021, up from 1.03% in 2020.

As always, if there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.

Unemployment Weekly Claims Report for the Week-Ending December 12, 2020

The Unemployment Insurance Weekly Claims report for the week ending December 12, 2020 has been released by the Department of Labor.

  • Seasonally adjusted initial claims: 885,000
  • 4 week moving average: 812,500
  • Seasonally adjusted insured unemployment rate: 3.8%
  • Seasonally adjusted insured unemployment number: 5,508,000
  • 4-week moving average: 5,726,250
  • Number of unadjusted claims: 935,138
  • Unadjusted insured unemployment rate: 3.7%
  • Unadjusted number claiming UI benefits: 5,492,701

The full news release report can be downloaded here.

 

Our office will monitor COVID-19 updates closely and will send out additional announcements as we become aware of any updates. You can also review these updates on our website at https://www.thomas-and-company.com/covid-19/ too.

Please reach out to your representative with any questions.

Maryland Unemployment Tax Rates Set to Rise in 2021

The Maryland Department of Labor, Licensing & Regulation announced today that unemployment tax rates for 2021 are to be determined with the state’s highest unemployment tax rate table.

However, unemployment benefits paid during fiscal 2020 are not to be included in the calculation of an employer’s tax rate, under an executive order (20-12-10-01) signed December 10, 2020 by Governor Larry Hogan.

Unemployment tax rates are to be determined with Table F for 2021 because of the impact of COVID-19 on the state unemployment trust fund. Tax rates for 2020 were determined with Table A, which has the lowest range of rates out of the state’s six unemployment tax tables.

Under the executive order, individual employer tax rates for 2021 are to be based on unemployment benefits charged from July 1, 2016, to June 30, 2019, instead of those charged from July 1, 2017, to June 30, 2020. This is to allow employers to maintain the same benefit ratio for 2021 as in 2020 and prevent unemployment benefits charged during the pandemic from further increasing 2021 tax rates.

As an example, an employer with a benefit ratio between .0163 and .0189 in Table A had a rate of 2.10%, whereas in Table F, the rate for that same benefit ratio will be 4.90%.

For 2021, tax rates for experienced employers are to range from 2.20% to 13.50%, compared with 0.30% to 7.50% in 2020. The tax rate for new non-construction employers is to be 2.60%, unchanged from 2020.

Maryland’s 2021 unemployment taxable wage base will also remain at $8,500 for 2021, unchanged from 2020.

As always, if there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.

Work Opportunity Tax Credit Transition Relief Issued for Empowerment Zones

On December 11, 2020 the IRS issued Notice 2020-78 providing additional instruction and transitional relief for employers that hired certain individuals residing in empowerment zones between January 1, 2018 and December 31, 2020.

Empowerment Zones are distressed areas that have been designated based on specific criteria and benefit from tax incentives, grants, and other forms of government assistance. Section 51 of this notice provides employers with a work opportunity tax credit for hiring certain individuals that identify with a targeted group. The Empowerment Zone designations under section 1391 expired after December 31, 2017 and were retroactively reauthorized on December 20, 2019, for tax years beginning January 1, 2018, through December 31, 2020.

Employers must receive, on or before the day on which such individual begins work for the employer, a certification from a Designated Local Agency that such individual is a member of a targeted group or must request certification that the individual is a member of a targeted group by submitting Form 8850 (Pre-Screening Notification and Certification Request for the Work Opportunity Credit) to a Designated Local Agency within twenty-eight days of hiring that individual. The certification of an individual as a Designated Community Resident under § 51(d)(5), or as a Qualified Summer Youth Employees under § 51(d)(7), requires that the individual reside within an empowerment zone.

This renewal allows employers to timely request certification on these employees by extending the deadline through January 28, 2021 for a Designated Community Resident or Empowerment Zone individual hired in 2018, 2019, and 2020.

As always, if there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.

Unemployment Weekly Claims Report for the Week-Ending December 5, 2020

The Unemployment Insurance Weekly Claims report for the week ending December 5, 2020 has been released by the Department of Labor.

  • Seasonally adjusted initial claims: 853,000
  • 4 week moving average: 776,000
  • Seasonally adjusted insured unemployment rate: 3.9%
  • Seasonally adjusted insured unemployment number: 5,757,000
  • 4-week moving average: 5,935,750
  • Number of unadjusted claims: 947,504
  • Unadjusted insured unemployment rate: 3.9%
  • Unadjusted number claiming UI benefits: 5,780,893

 

The full news release report can be downloaded here.

 

Our office will monitor COVID-19 updates closely and will send out additional announcements as we become aware of any updates. You can also review these updates on our website at https://www.thomas-and-company.com/covid-19/ too.

Please reach out to your representative with any questions.