Florida Passes Legislation Retroactively Lowering 2021 Unemployment Tax Rates

Florida employers have been shocked by the increase in unemployment tax rates in 2021.  Those rate increases were not a result of an increase in benefit charges assigned to employer’s accounts; Florida passed legislation in  2020 to remove benefit charges from the 2021 & 2022 tax rate computations assuming those charges were a result of unemployment claims associated with COVID-19.  However, due to the significant decrease in the state’s UI trust fund, statutory triggers went into effect that resulted in increases to several adjustment factors included in the total tax rate.  The Multiplier increased from -0.3778% to 2.3934% and the Final Adjustment Factor increased from -0.02% to 0.29%.  Due to Florida employers’ feedback and concern, the Florida Legislature and Department of Revenue have passed two separate pieces of legislation, retroactively lowering 2021 unemployment tax rates and extending tax payment deadlines for all employers in the state.

Governor Ron DeSantis signed Executive Order # 21-80 into law on March 29, 2021 which extends the due date for payment of unemployment tax for the first quarter of 2021 to May 28, 2021 as opposed to April 30, 2021.  However, the extension only applies to payments; employers are still required to complete and submit the Employer’s Quarterly Report (Form RT-6) no later than April 30, 2021.

Additionally, the Florida Senate passed Senate Bill 50 on April 12, 2021 and Gov. DeSantis signed it into law on April 19, 2021.  SB 50’s main initiative is to require sales tax collection from businesses who sell products online but have a physical presence in the state.  This additional revenue collected through online sales tax will go directly to the state’s unemployment trust fund thereby replenishing it to pre-pandemic levels.  In turn, SB 50 states that this will result in a retroactive tax rate decrease for calendar year 2021.

Although this is exciting news for Florida employers, SB 50 does not define what changes will occur to result in a rate decrease for 2021.  Similarly, the representatives with the Department of Revenue have not yet determined the effects of SB 50 and the resulting rate revisions.

Absent of receiving a revised 2021 unemployment tax rate currently, it would be our recommendation to our clients to file the Employer’s Quarterly Report (Form RT-6) no later than April 30, 2021 but withhold payment of taxes due for the first quarter of 2021 until either a revised tax rate notice is received or the deadline to make payment of May 28, 2021 arrives.

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 at www.thomas-and-company.com.

Josh Kendall

Author Josh Kendall

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