Indiana Revises Unemployment Tax Rate Schedules to Provide Stability Amidst COVID-19 Pandemic

By March 27, 2020April 17th, 2020COVID-19, Tax Implications

In response to growing concerns by Indiana employers relating to higher future unemployment tax rates as a result of the COVID-19 pandemic, Gov. Eric Holcomb signed  HB 1111 on March 21, 2020.  This measure will result in unchanged unemployment tax rates for Indiana employers through 2025.

Effective from 2021 to 2025, tax rates are to be determined with a new Schedule C, with which rates range from 0.5% to 3.8% for positive-rated employers and from 4.9% to 7.4% for negative-rated employers. This range of rates is unchanged from 2020.

The measure reduced the number of possible rate schedules to five from nine and widened the range of fund balance ratios applicable to each schedule. After 2025, the revised Schedule C generally is to be in effect when the fund balance ratio is at least 0.9% but less than 1.2%.

Rates for 2020 are determined under Schedule E, which until 2021 generally applies when the fund balance ratio is at least 0.8% but less than 1%.

Our office will be monitoring these situations closely and will send out additional announcements or make postings on our website (https://thomas-and-company.com/covid-19/) as we become aware of new developments.

Josh Kendall

Author Josh Kendall

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