14 June 2016 Wisconsin governor announces potential SUI tax decrease for 2017 Wisconsin Governor Scott Walker announced that his expectation that state unemployment insurance (SUI) rates will decrease in calendar year 2017. This is the second consecutive year of rate decreases and is attributed to the continued growth of the state UI trust fund balance. The combined savings for 2016 and 2017 is anticipated at approximately $135 million. Employers would save an estimated $38 million for calendar year 2017 if the trust fund balance equals or exceeds $900 million as of June 30, 2016, triggering a move in the UI tax rate schedule from Schedule B to Schedule C. As of May 31, 2016, the state's UI trust fund balance was $1,005,450,806. "Wisconsin's economy continues to improve and, coupled with the significant reforms made to the UI program since 2011, employers and workers today are benefiting from a fair, cost-effective and stable UI system," Governor Scott Walker said. "With an unemployment rate below the national average, initial UI claims running at their lowest level since 1989 and an historic high in the number of people employed, our state's economy is headed in the right direction. The growth of our UI Trust Fund provides another positive indicator for businesses looking to expand in Wisconsin and create more jobs." "The significant investments and commitment to talent development, reemployment services and UI program integrity under Governor Walker have moved Wisconsin's Trust Fund from a negative balance of $1.3 billion when Governor Walker took office to a positive balance of over $1 billion at the end of April 2016," DWD Secretary Ray Allen said. "It's worth noting Wisconsin's UI Trust Fund hasn't had a balance greater than $1 billion since October 2003." As we reported in Tax Alert 2015-939 and Tax Alert 2015-1840, Wisconsin employers will save approximated $97 million for calendar year 2016 because the UI trust fund balance exceeded $300 million on June 30, 2015 and the SUI tax rate schedule changed to Schedule B, down from Schedule A in effect since 2010. Tax rate notices are generally issued in October each year. For more information on Wisconsin SUI taxes, go to the Wisconsin Department of Workforce Development website. Wisconsin repaid its federal UI loan (which started in February 2009) during the last week of May 2014. As a result, Wisconsin employers saw their net FUTA tax rate return to 0.6% beginning for calendar year 2014. Employers were subject to a FUTA credit reduction for calendar years 2011-2013. Employers were also assessed for interest due to the federal government on the loan in 2011 and 2012, but were spared the additional taxes in 2013 and 2014 due to a provision of Act 20 which allocated $30 million of state general purpose revenues to pay the interest due.
Document ID: 2016-1034 | ||||||||||||||||||||
