The Massachusetts Department of Unemployment Assistance (“DUA”) has released revised 2021 unemployment tax rates for all employers. In a letter to employers, the DUA announced that these revisions would be available on their website as of today and will reflect a decrease in the solvency assessment, which was a major factor in the original tax rate increases felt by employers in 2021.
Unemployment tax rates have been adjusted due to a decrease in the solvency assessment from 9.23% to 1.12% for 2021. However, employers will now be assessed a new Covid-19 Recovery Assessment rate, which equals 10.50% of an employer’s unemployment tax rate and ranges from 0.099% to 1.509%.
The adjusted tax rates and recovery assessment rates are retroactive to January 1, 2021.
Unemployment tax payments for the first and second quarters of 2021 have been extended and are due by 3 p.m. Eastern time August 31, 2021.
The letter to employers included tax rate calculation examples and a set of frequently asked questions about adjusted tax rates and the recovery assessment.
This is exciting news for most Massachusetts employers, despite the late notice of these tax rate revisions and the addition of the COVID-19 Recovery Assessment Rate. Nevertheless, for those employers who receive a lower tax rate for 2021 because of these revisions, they will see an overall tax decrease for calendar year 2021 as opposed to what was budgeted under the originally assigned rate.
Because the DUA is not mailing these revised notices to employers of their third-party agents, we are in the process of retrieving these from the DUA website and verifying the calculations. We will send them out to our clients once that process is complete.
If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.