In December 2020, we reported that employer tax rates were set to increase in Hawaii for 2021. However, due to a bill signed on Mach 2, 2021 by Governor David Ige, Hawaii’s employers will not see as steep an increase as originally reported.
Under the measure (H.B. 1278), unemployment tax rates are to be determined with Schedule D and are to range from 0.20% to 5.80%. The provision is retroactively effective to January 1, 2021.
Schedule D also is to be in effect for 2022, regardless of the solvency of the state unemployment trust fund.
Tax costs will still be higher in 2021 than in 2020 because rates for 2020 were determined with Schedule C, which generally has lower rates than Schedule D. However, tax rates for 2021 initially were to be determined with Schedule H, the state’s highest unemployment tax rate schedule, for which rates range from 2.40% to 6.60%.
Additionally, for 2021 and 2022, unemployment benefit claims related to COVID-19 are to be excluded from the calculation of employers’ unemployment tax rates, which will also contribute to lower rates overall.
As always, if there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.