Under House Bill 3389, signed into law by Governor Kate Brown on July 27, 2021, Oregon employers may qualify for unemployment tax deferrals and forgiveness for 2021.
Under the measure, employers whose tax rates increased by at least 0.50% and up to 2.00% from 2020 to 2021 are to be able to defer payment of up to one-third (1/3) of the amount of unemployment taxes for 2021 until June 30, 2022.
In addition to the deferral option, there is also language that allows full forgiveness under the following circumstances:
- For employers whose tax rates increased by more than 1.00% and up to 1.50%, 50% of the deferrable amount is to be forgiven.
- For employers whose tax rates increased by more than 1.50% and up to 2.00%, 75% of the deferrable amount is to be forgiven.
- Employers whose tax rates increased by more than 2.00% are to have one-third of unemployment taxes forgiven.
To qualify for the deferral, employers must timely file tax and wage reports for 2021 and timely pay unemployment taxes for 2021 that are not deferred or forgiven. Employers also must have, as of January 1, 2021, paid all outstanding unemployment taxes and liabilities or have paid outstanding amounts due according to the terms of a payment plan.
Amounts deferred and not forgiven are to become subject to interest and penalties starting July 1, 2022.
Additionally, employers’ unemployment tax rates for 2022, 2023, and 2024 are to be calculated using the experience ratings used to calculate unemployment tax rates for 2020.
The measure also adjusts the calculation of the fund adequacy percentage ratio, which determines which rate schedule is to be in effect for a given year. The look-back period was extended from 10 years to 20 years, and 2020 and 2021 may not be considered high benefit cost periods for purposes of calculating trust fund solvency levels.
The measure is effective September 25, 2021, which is 91 days after the state legislature’s adjournment date of June 26, 2021.
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 for the latest news and updates.