Category

Regional

Louisiana Unemployment Tax Rates Hold Steady for 2021

The Louisiana Workforce Commission announced that unemployment tax rates are not to change for 2021.

Effective January 1, 2021, as in 2020, tax rates for experienced employers are to range from 0.09% to 6.20%.

For 2021, tax rates for new employers are to range from 1.16% to 2.89%.

Louisiana’s unemployment-taxable wage base is to be $7,700 in 2021

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

Hawaii Unemployment Tax Rates Set to Rise in 2021

The Hawaii Department of Industrial Relations announced that unemployment tax rates are set to increase for 2021.

Hawaii’s unemployment tax rates for 2021 are to be determined with the state’s highest unemployment tax rate schedule, Schedule H. Tax rates for experienced employers are to range from 2.40% to 5.20% for positive-rated employers and from 5.40% to 6.60% for negative-rated employers.

In 2020, Schedule C, which has the third-lowest range of rates out of the state’s eight unemployment tax rate schedules, was in effect. Rates under Schedule C range from 0.00% to 2.40% for positive-rated employers and from 2.80% to 5.60% for negative-rated employers.

Employers also are to be assessed an employment and training assessment of 0.01%, unchanged from 2020.

The tax rate for new employers is to be 5.20% in 2021, up from 2.40% in 2020.

The Department has indicated that it expects legislative action to implement a lower rate schedule for 2021 but this has not yet occurred.

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

Nebraska Unemployment Tax Rates Decrease for 2021

The Nebraska Department of Labor has confirmed that unemployment tax rates for 2021 are set to decrease.

Effective January 1, 2021, unemployment tax rates for positive-rated employers are to range from 0.00% to 1.08%, compared with 0.00% to 1.17% in 2020. The tax rate range for negative-rated employers is to be 5.40%, unchanged from 2020.

For 2021, unchanged from 2020, the unemployment tax rate for new non-construction employers is to be 1.25%, and the rate for new construction employers is to be 5.40%.

Nebraska’s standard unemployment taxable wage base is to be $9,000, and the modified wage base for experienced employers assessed the maximum tax rate is to be $24,000.

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

Alaska Unemployment Tax Rates Set to Rise in 2021

The Alaska Department of Labor announced that unemployment tax rates are set to increase for 2021.

For 2021, unemployment tax rates for non-delinquent experienced employers are to range from 1.00% to 2.07% and the rate for delinquent experienced employers is to be 5.40%.

Unemployment tax rates for employers will generally be higher than they otherwise would have been because a solvency adjustment surcharge of 0.30% is in effect for 2021. For 2020, a solvency adjustment credit of 0.40% is in effect.

Employees are to be assessed for 2021, as in 2020, an unemployment tax of 0.50% that employers are to deduct from wages.

Unemployment tax rates for new employers are expected to be released in mid-December.

Additionally, Alaska’s unemployment taxable wage base for 2021 is to be $43,600, up from $41,500 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.

Hawaii Taxable Wage Bases to Fall in 2021

The Hawaii Department of Labor & Industrial Relations announced yesterday that the unemployment insurance and temporary disability insurance taxable wage bases will decrease in 2021.

Effective January 1, 2021, the unemployment taxable wage base is to be $47,400, down from $48,100 in 2020. Hawaii’s unemployment tax rates for 2021 are to be released in mid-December.

Additionally, effective January 1, 2021, the temporary disability insurance taxable wage base is to be $1,102.90, down from $1,119.44 in 2020. To fund a temporary disability insurance plan, employers may deduct from an employee’s wages up to half of the premium cost for covering the employee. The amount deducted may not exceed $5.51 a week in 2021, and employers are liable for the rest of the plan’s cost.

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

Illinois Unemployment Tax Rates Set to Rise in 2021

The Illinois Department of Employment Security announced that unemployment tax rates are set to increase for 2021.

Effective January 1, 2021, unemployment tax rates for experience-rated employers are to range from 0.675% to 6.875%. These rates include a fund-building surtax of 0.475% in 2021, up from 0.425% in 2020.

The standard unemployment tax rate for new employers is to be 3.175% in 2021, up from 3.125% for 2020. There are to be no industries for which new employers are assessed a tax rate higher than the standard tax rate.

Illinois’ unemployment-taxable wage base for 2021 is to be $12,960, up from $12,740 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.

Kentucky Unemployment Tax Rates Set to Rise in 2021

The Kentucky Division of Unemployment Insurance announced that unemployment tax rates are set to increase for 2021.

Effective January 1, 2021, unemployment tax rates for experience-rated employers are to be determined with Schedule E. Rates are to range from 1.00% to 3.50% for positive-rated employers and from 7.50% to 10.00% for negative-rated employers.

Schedule A, which has the second-lowest range of rates out of the state’s six unemployment tax rate schedules, was in effect for 2020. Rates under Schedule A ranged from 0.30% to 9.00%.

Effective for 2021, the standard tax rate for new employers is to be 2.70%. The tax rate for new contract construction employers with out-of-state headquarters is to be 10.00%, up from 9.00% in 2020.

Kentucky’s unemployment-taxable wage base for 2021 is to be $11,100, up from $10,800 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.

Idaho Unemployment Tax Rates Decrease for 2021

The Idaho Department of Labor has confirmed that unemployment tax rates for 2021 are set to decrease.

Effective January 1, 2021, unemployment tax rates are to range from 0.207% to 0.691% for positive-rated employers and from 1.245% to 5.400% for negative-rated employers. In comparison, tax rates for 2020 ranged from 0.255% to 0.849% for positive-rated employers and from 1.527% to 5.400% for negative-rated employers.

The 2021 tax rates for experienced employers not assessed the maximum rate include a workforce development training-fund surtax that ranges from 0.00621% to 0.05808%.

The unemployment tax rate for new employers is to be 1.00% 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.

Colorado Unemployment Tax Rates Set to Rise in 2021

The Colorado Department of Labor & Employment announced that unemployment tax rates are set to increase for 2021.

Effective January 1, 2021, unemployment tax rates for experience-rated employers are to range from 0.71% to 4.10% for positive rated employers and from 5.27% to 9.64% for negative rated employers. As a comparison, unemployment tax rates in 2020 ranged from 0.58% to 7.40%.

The unemployment tax rate for standard new employers will remain at 1.70% in 2021; unchanged from 2020.

The 2021 tax rate is to be 2.07%, up from 1.61%, for new construction of buildings (Code 236) employers; 7.74%, up from 5.94%, for new heavy and civil engineering construction (Code 237) employers; and 2.91%, up from 1.61%, for new specialty trade contracting (Code 238) employers.

Colorado’s unemployment taxable wage base will remain unchanged at $13,600 in 2021.

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

Federal Unemployment Tax Rates For 2020 & Beyond

The United States Department of Labor has confirmed that employers in the U.S. Virgin Islands are to pay higher payroll costs for 2020 because of a Federal Unemployment Tax Act credit reduction.

A FUTA credit reduction is to apply to the U.S. Virgin Islands because the jurisdiction had a loan balance from the federal unemployment account and was assessed a credit reduction for 2019.

For 2020, employers in the U.S. Virgin Islands are to be assessed a general FUTA credit reduction of 3% on wages paid to employees for work attributed to the jurisdiction.

The reduction is to cause employers to pay an effective federal unemployment tax rate of 3.60%, or up to $252 for each employee when applied to the federal unemployment taxable wage base of $7,000. This is impactful because the standard effective tax rate is 0.60%, or up to $42 per employee, because the maximum credit that may be applied to federal unemployment tax generally is 5.40%.

An additional credit reduction, the benefit-cost rate (BCR) add-on, could have been in effect for the U.S. Virgin Islands for 2020, but the US DOL approved the jurisdiction’s application for relief from the add-on. Approval of the relief allowed employers in the U.S. Virgin Islands to avoid a BCR add-on of 0.70%, a cost of up to $49 for each employee.

The credit reduction percentages are to be reaffirmed by the Internal Revenue Service on the 2020 Form 940 Schedule A, Multi-State Employer and Credit Reduction Information. Additional amounts due because of 2020 credit reductions are to be paid by February 1, 2021, which also is the due date for the 2020 Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return.

Potential Future Credit Reductions

Many states have borrowed federal funds to pay for the surge in unemployment benefit claims caused by the COVID-19 pandemic, but the federal unemployment tax impact may be delayed until 2022.

Twenty states have loan balances that did not have balances at the start of 2020, according to the Treasury Department’s Bureau of the Fiscal Service. The states are California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Illinois, Indiana, Kentucky, Louisiana, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Ohio, Pennsylvania, Texas, Virginia, and West Virginia.

Maryland is authorized to borrow funds but does not have a balance.

For a state to be assessed a FUTA credit reduction, it must have a balance from the federal unemployment tax account on January 1st of two consecutive years and on November 10th of the year that the reduction would be assessed.

States that started borrowing in 2020 would be assessed a credit reduction of 0.30% for 2022 if balances remain January 1, 2021; January 1, 2022; and November 10, 2022, with the additional amounts due January 31, 2023. The credit reductions would raise federal unemployment tax costs per employee to $63 from $42 for employers in affected states.

Wage Bases Change for 2021

Modifications to unemployment taxable wage bases for 2021 have been acknowledged by 11 states thus far.

Wage bases are to increase in Arkansas, Iowa, Montana, Nevada, New Jersey, New York, Oklahoma, Washington, and Wyoming. Wage bases are to decrease in Missouri and Vermont.

Washington’s 2021 wage base, $56,500, is to be the highest unemployment wage base ever implemented.

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