November 27, 2017 Nevada SUI quarterly bond assessment may be eliminated in 2018 — proposed 2018 SUI average rate to remain the same as 2017 The Nevada Department of Employment, Training and Rehabilitation anticipates repaying its remaining bond balance in December 2017. The bond balance was incurred several years ago to pay off its federal unemployment insurance (FUTA) loan. This anticipated payoff is six months earlier than originally projected and if the goal is met, Nevada employers will avoid paying the state unemployment insurance (SUI) quarterly bond assessment for calendar year 2018. The Department is also proposing to maintain the average SUI tax rate for 2018 at 1.95%, the same as for 2016 and 2017. Combined, the overall average tax rate for 2018 would decrease from 2.63% for 2017 to 2.0% for 2018. These rates include the 0.05% Career Enhancement Program (CEP) surcharge. The average cost per employee would decrease to $610 in 2018, down from $775.85. (Hearing notice and agenda, Nevada Department of Employment, Training and Rehabilitation; (Telephone conversation, senior Department representative, October 9, 2017.).) The SUI taxable wage base will increase to $30,500 for 2018, up from $29,500 for 2017. The state's UI trust fund balance is expected to increase by $354 million from September 2017 to September 2018, bringing the state to its target solvency level of $1.3 billion. The Department will release the final rate schedule in early December 2017. Employer SUI tax rates are usually issued in mid- to late December. Ernst & Young LLP insights The Department repaid its FUTA loan during the first week of November 2013 through the issuance of bonds. This allowed the net FUTA tax rate paid by Nevada employers to return to 0.6% beginning with calendar year 2013. The tradeoff for keeping the net FUTA rate at 0.6% is that contributory employers have been required to pay a quarterly bond assessment to cover the principal, interest, and administrative payments on the bonds.? Collection of the quarterly bond assessment began with the first quarter 2014 and will continue to be collected from employers until the bonds are fully repaid, expected for December 2017.? The bond assessment is computed on a four-tier system (ranging from 0.17% to 0.89% for 2017), varying based on the employer's SUI experience with the quarterly SUI taxable wages multiplied by the employer's assigned bond factor rate. Go here for more information on the bond assessment rates for 2017. Read more about FUTA loans and bonds for financing SUI trust funds in the Ernst & Young LLP 2017 Guide to Unemployment Insurance here. ——————————————— ——————————————— EY Payroll News Flash | ||||
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