03 January 2018 Nevada SUI quarterly bond assessment eliminated as of fourth quarter 2017 — 2018 SUI average rate remains the same as 2017 According to a department representative, the Nevada Department of Employment, Training and Rehabilitation anticipates that it has repaid its remaining bond balance in full. Accordingly, the Department has decided that the third quarter 2017 is the last period that employers will pay the bond assessment. Employers will not submit a bond assessment return or pay the bond assessment starting the fourth quarter 2017. Employers will be notified of the elimination of the bond assessment in the mailing of the fourth quarter 2017 blank SUI tax return. The Department issued the 2018 state unemployment insurance (SUI) tax rate notices on December 22, 2017. As we reported, the average SUI tax rate for 2018 was maintained at 1.95%, the same as for 2016 and 2017. (Tax Alert 2017-1323.) Combined with the elimination of the bond assessment, the overall average tax rate for 2018 decreases 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 decreases to $610 in 2018, down from $775.85. (December 2017 Hearing notice and agenda, Nevada Department of Employment, Training and Rehabilitation.) The SUI taxable wage base increases to $30,500 for 2018, up from $29,500 for 2017. (Tax Alert 2017-1323.) Nevada proposed regulation would require all employers to file SUI returns electronically as of July 1, 2018 As we reported previously, a proposed revision of a Nevada unemployment insurance regulation would require all employers to electronically file quarterly state unemployment insurance (SUI) contribution and wage reports after July 1, 2018. A Department representative told EY that the public hearings regarding this rule change have concluded and the electronic reporting requirement is still expected to go into effect in mid-2018. She recommended that employers not currently filing electronically prepare now to do so. For information on the electronic reporting of Nevada SUI returns, see the Department's Employer Self-Service (ESS) website. The bond balance was incurred several years ago to pay off the Department's federal unemployment insurance (FUTA) loan. 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% was that contributory employers were required to pay a quarterly bond assessment to cover the principal, interest, and administrative payments on the bonds since first quarter 2014.? The bond assessment was 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. The bond balance payoff occurred more than six months earlier than originally projected, resulting in Nevada employers avoiding payment of the quarterly bond assessment as of the fourth quarter 2017. Document ID: 2018-0009 |
