During the 2018 Legislation Session, the Kentucky Legislature General Assembly enacted the Service Capacity Upgrade Fund (SCUF), through HB 487, Section 139. Per KRS 341.243, all contribution rates beginning with the 3rd quarter of 2018 shall be reduced by 0.075%, in order to implement SCUF. There is no increase or decrease in the total amount of tax employers will pay. Instead, this reduction will divert 0.075% of the contributions that would have been applied to your employer reserve account, and apply to SCUF. In addition, you will not be able to claim SCUF payments on your Federal Unemployment Tax filings. Below is an example of how your 2018 reporting periods will change:
Each year SCUF is in effect, all contribution rates will be reduced by 0.075%. SCUF is estimated to be in effect for the next 5 years or until the trust fund reaches $60 million.
If you are an employer who files using Option 1 or Option 3, you will need to update your ICESA ‘T’ Record Format for Field positions 145-149 and 150-160. You are an employer who files using Option 2 (Online Form Entry), the rates and adjustments have already been made and require no changes on your part.
Following is a 2018 Contribution Rate Schedule (Schedule B) to illustrate the rate breakdown once SCUF takes effect:
As always, if there are any questions please do not hesitate to contact us.