The Kentucky General Assembly has passed House Bill 144, retroactively lowering 2022 unemployment tax rates for all employers in the state.
House Bill 144 was introduced on January 4, 2022, and the bill received full support from the Economic Development & Workforce Investment Committee as well as employers within the state who have seen a drastic increase in their state unemployment tax rates from 2021 to 2022.
HB 144 freezes the UI tax rate schedule at Schedule A for 2022; a decrease from the originally assigned Schedule C. This allows rates to return to 2021 levels providing relief to all experience-rated employers. Due to this change, tax rates will range from 0.30% to 9.00%. The new-employer tax rate will remain at 2.70% for 2022.
Additionally, HB 144 will decrease the 2022 unemployment taxable wage base from $11,100 to $10,800.
One issue remains: Will the Kentucky Division of Unemployment Insurance be able to generate and issue revised 2022 tax rate notices for all employer prior to the first quarter 2022 filing and payment deadline of May 2, 2022? In speaking with representatives at the Division, the expectation is to send out these revisions “very soon”. In the absence of a revised tax rate notice reflecting the employer’s newly lowered rate for 2022, the Division has provided guidance indicating that employers should pay at their originally assigned rate under Schedule E. The Division has indicated that should this action generate an overpayment on the employer’s account, you will have an opportunity to either use that overpayment toward future tax liabilities or request a refund once the credit amount is established.
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 at www.thomas-and-company.com.
