Maryland Unemployment Tax Rates Set to Rise in 2021

By December 14, 2020News, Regional

The Maryland Department of Labor, Licensing & Regulation announced today that unemployment tax rates for 2021 are to be determined with the state’s highest unemployment tax rate table.

However, unemployment benefits paid during fiscal 2020 are not to be included in the calculation of an employer’s tax rate, under an executive order (20-12-10-01) signed December 10, 2020 by Governor Larry Hogan.

Unemployment tax rates are to be determined with Table F for 2021 because of the impact of COVID-19 on the state unemployment trust fund. Tax rates for 2020 were determined with Table A, which has the lowest range of rates out of the state’s six unemployment tax tables.

Under the executive order, individual employer tax rates for 2021 are to be based on unemployment benefits charged from July 1, 2016, to June 30, 2019, instead of those charged from July 1, 2017, to June 30, 2020. This is to allow employers to maintain the same benefit ratio for 2021 as in 2020 and prevent unemployment benefits charged during the pandemic from further increasing 2021 tax rates.

As an example, an employer with a benefit ratio between .0163 and .0189 in Table A had a rate of 2.10%, whereas in Table F, the rate for that same benefit ratio will be 4.90%.

For 2021, tax rates for experienced employers are to range from 2.20% to 13.50%, compared with 0.30% to 7.50% in 2020. The tax rate for new non-construction employers is to be 2.60%, unchanged from 2020.

Maryland’s 2021 unemployment taxable wage base will also remain at $8,500 for 2021, unchanged from 2020.

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Josh Kendall

Author Josh Kendall

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