July 26, 2018 Vermont SUI tax rates decreased July 1, 2018; SUI taxable wage base to decrease in 2019 The Vermont Department of Labor announced that employers will see the second decrease in a row in state unemployment insurance (SUI) tax rates for fiscal year (FY) 2019 (July 1, 2018-June 30, 2019). (Press release, June 22, 2018.) For FY 2019, the SUI rate schedule will change from Tax Rate Schedule IV to Tax Rate Schedule III. As a result, FY 2019 tax rates will range from 0.8% to 6.5%, down from a range of 1.1% to 7.7% for FY 2018.The FY 2018 rates were down from a range of 1.3% to 8.4% on Schedule V for FY 2017. ? Newly liable employers will continue to pay SUI contributions at the rate of 1%, with the exception of certain foreign construction classifications. 2019 SUI wage base According to a senior representative of the Department, the SUI taxable wage base will decrease to $15,600 for calendar year 2019, down from $17,600 for 2018. (Email response to inquiry, June 5, 2018.)? Prior to FY 2018, the?highest rate schedule had been in effect since FY 2011? Owing to the recession, the Department began borrowing from the federal government to continue to pay UI benefits when the state UI trust fund became insolvent in March 2010.? As a result, the SUI rate schedule moved to highest Tax Rate Schedule V as of FY 2011 and remained there until FY 2018. SUI taxable wage base to also decrease for calendar year 2019 As another fund balance builder, legislation increased the SUI taxable wage base from $8,000 to $10,000 for calendar year 2010; $13,000 for 2011; and $16,000 for 2012–2014.? Once the federal UI loan was repaid in July 2013 and Vermont's unemployment trust fund returned to a positive balance, the SUI taxable wage base was indexed to increases in the state annual average wage, rather than be set at $16,000. As a result, the taxable wage base for calendar year 2015 was $16,400; for 2016, $16,800; for 2017, $17,300; and for 2018, $17,600. (SB 290, signed by the governor on May 24, 2010) The law provides further that when the state's trust fund balance increases to a level that allows Rate Schedule III to be in effect, the SUI taxable wage base will decrease by $2,000 for the following year, and decrease by another $2,000 when Rate Schedule I is in effect. Also, effective July 1, 2018, the maximum weekly unemployment benefit is indexed upwards to 57% of the average weekly wage. The prior maximum weekly benefit amount was $466, increasing to $498 as of July 1, 2018. This change is also directly tied to the change in the tax rate schedule. Mailing of FY 2019 rate notices?? Per the Department representative, the FY 2019 SUI rate notices were mailed to employers on June 25, 2018. For more information, contact the Vermont Department of Labor at +1 802 828 4344 Ernst & Young LLP insights? Vermont is one of four states (New Hampshire, New Jersey, Tennessee, and Vermont) that assign SUI tax rates on a fiscal year basis, rather than a calendar year basis. The three other fiscal year states will release their FY 2019 tax rate notices in Summer-Fall 2018.?? ———————————————
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