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Josh Kendall

Massachusetts Extends First Quarter Unemployment Contributions Deadline

The Massachusetts Department of Unemployment Assistance has extended the first quarter 2021 contribution deadline to Monday August 2, 2021.

On April 15, 2021, the Department extended the deadline from April 30, 2021 to Tuesday, June 1, 2021 in order to provide employers additional time due to significant rate increases for calendar year 2021.  Today, they decided to further extend this deadline to continue this courtesy to employers in the state.  This extension means that both first and second quarter 2021 contributions will now be due on the same day.

The Department is also considering legislation that may retroactively lower 2021 tax rates.  Once this decision is made and legislation is passed, additional information will be forthcoming.

As most are aware, Massachusetts employers experienced a significant unemployment tax increase in 2021, primarily due to the drastic increase in the Solvency Assessment, which is a major component in the rate calculation.  Although it has not yet been determined if Massachusetts employers will receive retroactive relief, we have already seen similar situations in six states that resulted in rate revisions.

As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.


New Mexico Revises 2021 Unemployment Tax Rates

The New Mexico Department of Workforce Solutions announced yesterday that a review and recalculation of all New Mexico employers’ 2021 unemployment tax rates had been conducted under the provisions of the Small Business Recovery Act of 2020.  As a result of this review, revised 2021 tax rate notices are being mailed out to employers informing them of any changes.

The Department recalculated the tax rate for over 50,000 contributory employers to omit benefit charges, employer wages, and contributions for the period of March 1, 2020 through June 30, 2020.  As a result of the recalculation, roughly 9,000 employers had their tax rate for 2021 decrease when compared to the rate initially issued in November 2020.  However, roughly 2,000 employers received a tax rate increase and the remaining employers’ rates remained unchanged.

Part of this legislation and review has resulted in an extension in the first quarterly payment due date to May 31, 2021.  Employers who have already made their first quarter payment and received a notice that their tax rate decreased will receive a credit on their account, or may request a refund by logging into their employer account in the Unemployment insurance Tax & Claims System or by contacting the Unemployment Insurance Operations Center at 1-877-664-6984, 7:00 a.m. to 5:00 p.m. Monday through Friday.

Although this is exciting news for most New Mexico employers, the late notice of this review and extension of payment does little to provide immediate relief to employers as most have already submitted their payment for first quarter 2021.  Nevertheless, for those employers who receive a lower tax rate for 2021 will see an overall tax decrease for calendar year 2021.

As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.

Update: Florida Issues Further Guidance Relating to Recent Unemployment Tax Legislation

As most of you know, we recently issued a bulletin relating to legislation passed in Florida pertaining to unemployment taxes.  If you didn’t receive our prior article, you can read it here.

As a follow up, the Florida Department of Revenue has issued further guidance relating to SB 50 today.  You can access the entire Tax Information Publication (“TIP”) from the Department here.

In short, this recent TIP reiterates information covered in SB 50:

  • Tax rates for 2021 will be retroactively adjusted and revised tax rate notices will be issued. The revisions will exclude all benefit charges from the second quarter of 2020 and prevents the application of the positive adjustment factor, which normally increases when the trust fund balance decreases.
  • Tax payment extensions for the first quarter of 2021 remain in effect due to Executive Order #21-80. The payment deadline for first quarter 2021 is May 28, 2021.
  • Tax rates for 2022-2025 will exclude benefit charges from the second, third, and fourth quarters of 2020 and all benefit charges paid as a direct result of a government order to close or reduce capacity of a business due to COVID-19. It will also exclude the application of the positive adjustment factor.  And lastly, benefit charges from the first and second quarters of 2021 may be decreased if total tax collection for rate year 2022 exceeds $475.5 million.

COVID-19 Pandemic Relief Legislation: Update on the Extension (or Expansion) of the CARES Act

As both parties continue negotiations on continued virus relief, Republicans announced their own plan for a new U.S. virus-relief bill broadly endorsing a fresh round of stimulus checks to individuals, extended supplemental unemployment benefits and additional funding for COVID-19 testing while also voicing doubts over President Trump’s desire for a payroll tax cut.

The details remain in flux as GOP senators hashed out their opening bid in negotiations with Democrats on legislation to prop up the slowed U.S. economy. The differences between the GOP and the White House regarding the payroll tax cut threatens to push any action on the stimulus into August.

Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows started this week by saying their goal was to get a stimulus bill out of Congress by the end of next week (July 31st). But after getting pushback from Senate Republicans on several issues, including the payroll tax cut, both ended the day Tuesday dialing back expectations.

Mnuchin and Meadows met Tuesday (July 21st) over lunch with Republican Senators, but no outline for legislation emerged. Louisiana Republican Senator John Kennedy said the two Trump advisers discussed a lot of ideas, but “we haven’t reached a conclusion on anything.”

Democrat Senators Chuck Schumer and Nancy Pelosi said the lack of consensus among Republicans means real negotiations cannot start yet to bridge the differences between the GOP plan for $1 trillion in stimulus funds and the Democrats’ proposal for a $3.5 trillion package.

All the while, President Trump has expressed confidence that a deal will emerge saying “We’re working very hard on it, we’re making a lot of progress. I know that both sides want to get it done.”

The White House and Congress have only a few weeks to come up with another stimulus package before lawmakers take a scheduled August break and the $2.9 trillion flood of federal money passed by Congress earlier in the year begins to dry up.

The crux for Republicans is the President’s insistence on cutting or suspending the payroll tax paid by employers and employees, which funds Social Security and Medicare.

Mnuchin said it would be included in the Republican proposal, but some GOP senators, such as South Dakota’s John Thune, said they remain skeptical. Thune has stated “I’m not a fan of that. If it’s a choice between doing checks and payroll tax cut, I think it’s pretty clear the checks actually have a more direct benefit to the economy.”

Although Trump has suggested he might not sign a bill without the payroll tax cut, Mnuchin and Meadows indicated some flexibility in talks.

There are signs of a possible compromise on extending the supplemental unemployment insurance that was part of the stimulus measure passed in March and is set to expire on July 31st.

Section 2104 of the CARES Act provided individuals who were unemployed as a result of COVID-19, $600 a week in additional unemployment benefits, completely funded by the federal government. Republicans argued it created a disincentive for returning to work in some areas because unemployed individuals could get more than they earned at their jobs. Thus, some GOP lawmakers have floated the idea of lowering the supplement to $200 or $400 as part of the new package.

White House Press Secretary Kayleigh McEnany has said that the administration favors some type of additional unemployment aid, along with direct checks to individuals and a payroll-tax holiday for middle and low-income Americans.

Senate Majority Leader Mitch McConnell said the GOP plan will include a second round of the Paycheck Protection Program for small businesses, but it would be targeted to businesses most affected by the pandemic. He said there will be funding to reimburse businesses for the costs of safe workplaces, including personal protective equipment, virus testing, cleaning and remodeling to protect workers and entice customers. Additionally, there also will be money for some child-care assistance and funding for a vaccine. The Republican plan also will have $105 billion to aid schools in safely reopening.

As always, if there are any questions please do not hesitate to contact us or visit our website at

Colorado Unemployment Taxable Wage Base to Gradually Increase Until 2026

The Colorado Department of Labor & Employment announced that the unemployment taxable wage base is set to more than double by 2026 under legislation that also expanded the state shared-work program and unemployment benefit eligibility.

Under Senate Bill 207, signed into law by Governor Jared Polis on July 14th, the wage base is to remain at $13,600 in 2021, unchanged from 2020. Then, the wage base is then set to rise to $17,000 for 2022; $20,400 for 2023; 23,800 for 2024; and $27,200 for 2025. Effective Jan. 1, 2026, the wage base is to be $30,600 and will then be annually adjusted moving forward driven by the percentage change in the state’s average weekly wage.

Employers are not to be assessed a solvency surcharge for 2021 or 2022, regardless of the balance of the unemployment trust fund.

Among the measure’s other provisions, which took effect July 14, 2020:

  • Negative-rated employers are no longer ineligible to participate in the state’s shared-work program.
  • The amount of time within which an employer must respond to separation information requests was reduced to seven days from 12 days.
  • Workers are entitled to unemployment benefits when they separate from work because an employer is noncompliant government guidelines concerning disease prevention, to care for a quarantined or ill family member, or to care for a child enrolled in a school that closed because of a public health emergency.
  • Effective until Sept. 1, 2022, the amount of wages a worker may earn before unemployment benefits are reduced is increased. Wages exceeding 50% of a worker’s weekly benefit amount, up from 25%, are deducted from the weekly benefit.

As always, if there are any questions please do not hesitate to contact us or visit our website at

COVID-19 and Future Unemployment Tax Rates

As we all experienced in one way or another, many state unemployment agencies had difficulty managing the drastic increases in unemployment compensation claims arising from the COVID-19 pandemic. Just as state agencies are catching up with UI benefit payment issues, many are also having difficulty matching benefit charges with employer’s accounts. The additional $600 payment required under Section 2104 of the CARES Act and the state by state emergency orders issued for “non-charging” of employer accounts have created additional challenges in this regard and provided little time for state agencies to make changes in their systems to accommodate employers.

State unemployment taxes in 2021 and 2022 are likely to increase, whether it be due to individual employer’s experience history or a depletion in state unemployment trust funds. Regardless, employers and state agencies should be careful in reviewing charges to employer accounts to ensure compliance with federal and state laws.

In most states, contribution rates for 2021 are based on unemployment claims filed and benefits payments for the one-year period ending June 30, 2020. State agencies are now faced with the difficult task of reconciling the benefits paid with employer account charges identified for COVID-19-related claim payments. State unemployment compensation charge statements should be closely reviewed with respect to a number of questions related to federal and state laws and special COVID-19 related provisions, including but not limited to:

  1. The extra $600 paid as Federal Pandemic Unemployment Compensation (FPUC) under Section 2104 of the CARES Act should not be charged to employer accounts. This applies not only to the most recent separating employer accounts but also to non-separating base period only chargeable accounts. The $600 charge may not show up as a separate charge but may be included in total charges.
  2. Employer accounts should not be charged for unemployment compensation related to COVID-19 as provided in Executive Orders from Governors and/or state legislative bodies adopted to provide relief from COVID-19 related unemployment claims.

Requests for relief of charges should be submitted in a timely manner to state agencies to enable corrections to be made as early as possible and thereby avoid long-term impacts on future tax rate calculations.

Additionally, contribution rates for 2021 that are typically released between November & February should be reviewed for timely appeal. In the event that any discrepancy is identified, an issue should be raised immediately to avoid erroneous factors used in tax rate assignment.

Unfortunately, the delay in payment of unemployment compensation and the complex programming required for proper charging of employer accounts may take time to sort out by state agencies. Even if there is non-charging of benefits to individual employer accounts due to COVID-19, there may also be increases in 2021 and 2022 due to the impact of lower average payroll used to determine rates. The extent of additional taxes for 2021 may not be determined until the end of 2020. Employers and states should be working through these details to assure that the appropriate charges, payments and contribution rates are determined under the applicable laws.

The last point to consider relates to additional increases in UI taxes specifically relating to federal unemployment taxes (FUTA). Many state UI trust funds have been depleted and this may trigger solvency tax increases and interest on Title XII federal loans in years to come. Our office is monitoring this matter, as we did during The Great Recession, and will continue to provide updates on this as they become available.

As always, if there are any questions please do not hesitate to contact us or visit our website at

Iowa Unemployment Taxable Wage Base to Rise in 2021

The Iowa Department of Workforce Development announced today that the unemployment taxable wage base is set to rise to $32,400 in 2021, up from $31,600 in 2020.

The change to the taxable wage base takes effect Jan. 1, 2021.

The Department’s unemployment tax rates for 2021 are expected to be finalized in December.

As always, if there are any questions please do not hesitate to contact us or visit our website at

New Hampshire Unemployment Tax Rates to Rise for the Third Quarter of 2020

The New Hampshire Employment Security Department announced on July 17th that unemployment tax rates will increase for the third quarter of 2020.

The balance of the state unemployment insurance trust fund fell to less than $250 million for the second quarter, triggering a rise in tax rates, the Department said on its website.

Tax rates for the third quarter range from 0.10% to 2.70% for positive-rated employers and from 4.30% to 8.50% for negative-rated employers. For the second quarter, rates ranged from 0.10% to 1.70% for positive-rated employers and from 3.30% to 7.50% for negative-rated employers.

The tax rate for new employers is 2.70%, up from 1.70%.

Tax rates for positive-rated employers and new employers included a solvency-threshold tax rate reduction of 1.00% for the second quarter but this has now triggered off. A surcharge of 1.50%, which was in effect for the second quarter at 0.50%, is included in tax rates for negative-rated employers.

As always, if there are any questions please do not hesitate to contact us or visit our website at

New Jersey Unemployment Tax Rates Hold Steady for 2020/2021

The New Jersey Department of Labor and Workforce Development has confirmed that unemployment tax rates for the one-year period beginning July 1, 2020 will remain the same as the prior period.

Effective July 1, 2020, New Jersey’s experienced-employer unemployment tax rates are to be determined with Table B and are to range from 0.40% to 5.40%.

The general unemployment tax rate for new employers is to remain at 2.80% during this period.

New Jersey is one of four states that generally determines unemployment tax rates on a fiscal-year basis.

As always, if there are any questions please do not hesitate to contact us or visit our website at

IRS Releases Draft of 2020 Federal Unemployment Tax Return Form 940

On June 24, 2020, the Internal Revenue Service issued a draft version of the 2020 Form 940, Employer’s Annual Federal Unemployment Tax Return.

The draft Form 940, which is used by employers to report their annual federal unemployment tax liability, was not substantially revised from the 2019 version of the form.

A draft version of the form’s 2020 Schedule A, Multi-State Employer and Credit Reduction Information, was also released and did not contain substantial changes. The schedule, which is used to report additional tax owed because of federal unemployment tax credit reductions, lists the U.S. Virgin Islands as the only potential credit-reduction jurisdiction for 2020.

Finalized versions of Form 940 and Schedule A are expected to be released in November and are to reaffirm credit reduction percentages, which are to be finalized on November 10th by the U.S. Department of Labor.

As always, if there are any questions please do not hesitate to contact us or visit our website at