Wisconsin 2017 state unemployment insurance (SUI) tax rates will range from 0.0% to 12% for small employers with annual taxable payroll of less than $500,000, and 0.05% to 12% for large employers with annual taxable payroll of $500,000 or more. (Department of Workforce Development website)

As we previously reported, because the state's UI trust fund balance exceeded $900 million on June 30, 2016, the 2016 SUI rate schedule moves from Schedule B to Schedule C, saving employers an estimated $38 million for 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. (Tax Alert 2016-1034)

New small employers will pay at 3.05% for 2017 (down from 3.25%) and new large employers will pay at 3.25% (down from 3.4%), with the exception of new construction employers who will pay at 4.4% for small employers and 4.55% for large employers (down from 6.6% for 2016).

Taxable wage base

The taxable wage base for 2017 will remain at $14,000.

2017 SUI rate notice mailing date

The Wisconsin Department of Workforce Development (DWD) began mailing the 2017 SUI tax rate notices to employers on October 11, 2016.

For more information on Wisconsin unemployment taxes, go to the Department's website.

2017 rates could be lowered if voluntary contributions made by November 30

Merit-rated employers may make a voluntary contribution by November 30, 2016 to lower their tax rates by one rate bracket. Voluntary contribution payments may be made by check or online via the Department's EFT debit payment system. Voluntary contributions are nonrefundable, so careful calculation is recommended. See the specific instructions included with your 2016 tax rate notice or the Department's website for a voluntary contribution calculator.

Status of Wisconsin's UI trust fund

Wisconsin repaid its federal unemployment insurance (UI) loan balance in 2014, returning the net FUTA tax rate to 0.6% beginning for calendar year 2014, after having a credit reduction for years 2011-2013. Wisconsin started borrowing in February 2009, with the state's UI trust fund reaching a negative $1.3 billion balance at its lowest.

As of June 30, 2016, the state's UI trust fund balance was $ 986,676,751. The state's SUI trust fund ended calendar year 2014 with a balance of $214 million, the first year since 2008 that the trust fund finished a year in the black. The trust fund reached a positive balance of over $1 billion at the end of April 2016 having not had a balance greater than $1 billion since October 2003.

Changes to reserve fund statements

In June 2016, the Department began mailing Reserve Fund Balance Statements?only when there are benefit charges or benefit adjustments?posted to employer accounts. Employers will no longer receive a statement by mail when the only transaction affecting their reserve fund balance is a payment. All statements will continue to be available. Employer reserve fund balances as of June 30 each year are used in determining the next year's SUI tax rate.

For more information, see the Department's October 2016 employer newsletter.

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