Update: Massachusetts Issues Further Guidance Relating to Unemployment Taxes for 2021

By June 2, 2021June 10th, 2021COVID-19, News, Regional, Tax Implications

On Friday, May 28, 2021, Governor Charlie Baker signed legislation that will exclude all COVID-19 related benefits paid between March 10, 2020 and August 1, 2021 from the unemployment insurance solvency rate calculation.  As a result, the Massachusetts Department of Unemployment Assistance will recalculate and issue revised 2021 unemployment tax rate notices by late July.

In a statement released by the MA DUA yesterday, it was intimated that the revised 2021 rates would more closely align with the 2020 rate calculation in most cases but that has yet to be confirmed.  The DUA also stated that until employers receive their revised 2021 unemployment tax rate in late July, employers are advised to use their 2020 tax rates, retroactive to January 1, 2021.

Also as part of this legislation, the DUA will be including a quarterly COVID-19 recovery assessment for all experience-rated employers, retroactive to January 1, 2021.  This is part of the DUA’s plan to recover the cost of benefits paid by the UI Trust Fund in 2020 & 2021 during the COVID-19 crisis and more manageably spread these costs over time.  It is unclear as to the impact this new assessment will have on the revised tax rates at this time.

In addition to the issuance of revised 2021 tax rates, the DUA has again extended the first quarter 2021 contribution deadline, along with an extension of the second quarter 2021 contribution deadline.  Both contributions are now due on August 31, 2021.

As you may recall, just days before this legislation was signed, the DUA had announced and extension of the first quarter 2021 contribution deadline from April 30, 2021 to August 2, 2021.  This happened just weeks after the DUA announced on April 15, 2021 that the same deadline had been extended from April 30, 2021 to June 1, 2021 in order to provide employers additional time due to significant rate increases for calendar year 2021.

As a recap, here is where Massachusetts employers stand as of this bulletin:

  • Revised 2021 tax rates will be issued by late July and those rate calculations will NOT include COVID-19 related benefits paid between March 10, 2020 and August 1, 2021 from the unemployment insurance solvency rate calculation.
  • The revised 2021 tax rate WILL include a new quarterly COVID-19 recovery assessment for all experience-rated employers.
  • The Quarterly Employment & Wage Detail filings for first and second quarters remain on normal schedule (deadlines of April 30, 2021 & July 30, 2021, respectively).
  • Contribution deadlines for first and second quarters 2021 have been extended and are due no later than August 31, 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.

 

Josh Kendall

Author Josh Kendall

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