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Connecticut Changes Unemployment Tax Rate Calculation for 2022

By October 25, 2021January 14th, 2022Tax Rates, Unemployment Tax

The Connecticut Department of Labor has announced that the method used to calculate the 2022 unemployment tax rates will be modified because of Public Act 21-5.

Prior to the passage of PA 21-5, Executive Order 7W was signed into law by Governor Lamont which provided relief to employers in Connecticut by not assigning benefit charges to tax rate calculation for unemployment claims that were filed as a result of the public health and civil preparedness emergency.  EO 7W has since expired.

Absent of PA 21-5, unemployment tax rates for 2022 would be calculated using taxable payroll and benefit charges for the three-year period beginning July 1, 2018 through June 30, 2021.  However, pursuant to PA 21-5, the following changes have been made for 2022:

  • For previously established employers: Benefits charged and taxable wages reported between July 1, 2019 and June 30, 2021 will not be utilized in the tax rate calculation, and will therefore be disregarded when calculating the employer’s unemployment tax rate for taxable years starting on or after January 1, 2022.
  • For new employers: Statewide benefits paid to claimants and taxable wages reported for calendar years 2020 and 2021 will not be utilized in the new employer tax rate calculation and will therefore be disregarded when calculating the unemployment tax rate for tax years starting on or after January 1, 2022.  Thus, the rate charged to employers who have not participated in the system long enough to have their own experience rates will not be affected by the benefits paid and the taxable wages reported during those years.

It is important to note that employers who earned a tax rate based on experience in 2021 may be subject to the new-employer tax rate in 2022 should the exclusion of taxable payroll for the period from July 1, 2019 through June 30, 2021 result in lack of sufficient experience to qualify for a calculated rate in 2022.

No action is required by employers at this time.  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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