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The Ohio 2020 state unemployment insurance (SUI) tax rates will range from 0.3% to 9.4%, up from the 2019 range of 0.3% to 9.2%.

The 2020 SUI taxable wage base reverts to $9,000, down from $9,500 for 2018 and 2019.

New employers, except for those in the construction industry, will continue to pay at 2.7%. New construction employers will pay at 5.8% for 2020, down from 5.9% for 2019.

Employers can potentially reduce their 2020 SUI rate if they take advantage of statutory elections by December 31, 2019.

SUI wage base increased for calendar years 2018–2019

As the result of 2016 legislation (SB 235), the SUI taxable wage base increased from $9,000 to $9,500 for calendar years 2018–2019. The taxable wage base reverts to $9,000 effective January 1, 2020 (unless changed by future legislation). (EY Payroll Newsflash Vol. 18, #001, 1-3-2017.)

Mailing of 2020 rate notices

The Ohio Department of Job & Family Services will issue the 2020 tax rate notices to employers on or before December 1, 2019. Employers also receive SUI tax rates through the Department's electronic reporting system.

Employers may protest the information used in computing their 2020 SUI tax rates within 30 days of the date on the rate notice.

2020 SUI tax rates are the result of continued economic conditions

As of the computation date of the 2020 rates and due to recent economic conditions, the Ohio Unemployment Compensation Trust Fund continues to be at more than 60% below what is considered the "minimum safe level." Therefore, the 2020 tax rates will continue to include an across-the-board increase to protect the financial integrity of the trust fund.

This increase will help rebuild the trust fund to the appropriate level. The additional taxes paid as a result of the increase are credited 50% to the mutualized account and 50% to employers' accounts.

Penalty rate applies for late wage reporting

Employers that did not furnish the wage information necessary for the computation of their 2020 experience rate by September 1, 2019, are assigned a contribution rate equal to 125% of the maximum experience rate possible, for a total rate of 11.8% for 2020.

If the employer files the necessary wage information by December 31, 2019, the rate will be revised to the appropriate SUI experience rate. Employers that file the necessary wage information after December 31, 2019, but within 18 months after that date, will have their 2020 SUI tax rate revised to 120% of the rate that would have applied if the employer had timely furnished the wage information.

Statutory election can reduce 2020 rates if employers act by December 31, 2019

Ohio employers may be able to lower their SUI rates for 2020 by taking advantage of statutory elections offered by Ohio. These include: (1) a voluntary contribution and/or (2) a joint account or "Common Rate Group."

• Voluntary contributions. Experience-rated employers may make a voluntary contribution to reduce their assigned SUI tax rate by December 31, 2019. The voluntary payment increases the amount of the employer's reserve account and thereby may reduce the employer's SUI tax rate. Not all voluntary contributions are advantageous, and the advantages of a voluntary contribution may be amplified by anticipated increases in an employer's workforce.

• Joint account (common rate group). Companies with multiple accounts in Ohio may also lower their overall SUI costs by forming a joint account (referred to in Ohio as a common rate group) by December 31, 2019. Common rate groups are only available to Ohio employing entities that are commonly owned. Other restrictions also apply. By forming a common rate group, the unemployment experience of two or more Ohio employers are combined to obtain a single SUI tax rate. The members of a common rate group with favorable employment history can share their unemployment insurance reserves with other members of the common rate group, effectuating an overall reduction in state unemployment taxes. In a large corporate organization, not all members need to be included in the common rate group election. Instead, entities may be included in the common rate group based on the overall desired SUI tax rate results.

A common rate group election offers an above-the-line tax benefit that does not require a change in the corporate structure. Even more advantageous is the fact that members of a common rate group may dissolve the group after only one year. Each entity continues to file separate SUI returns after the common rate group is established.

• Ohio businesses must act by December 31, 2019. To achieve the benefit of a common rate group election, an application must be filed (postmarked) with the state by December 31, 2019, for the 2020 tax year. To achieve the benefit of a voluntary contribution, the payment must be postmarked by December 31, 2019.

For more information regarding SUI taxes in Ohio, see the Department's website or contact the Contribution Section at +1 614 466 2319.

New reporting system coming in 2020

Ohio will implement a new unemployment insurance system beginning in 2020, the SOURCE (State of Ohio Unemployment Resource for Claimants and Employers).

The SOURCE will allow employers and their agents to manage all their unemployment tax, benefits, and appeals information in one place and provide expanded electronic options. Employers and agents will start using the SOURCE in 2020. Claimants will begin using it in 2021.

The Department will continue to post information on the new system to its website. In addition, as the launch date approaches, employers will receive information from the Department in letters and emails, with links to online tutorials.

Employers are encouraged to confirm the Department has their Federal Employer Identification Number (FEIN) and current contact information. Also, employers should make sure they have working log-in credentials for the current reporting system, ERIC. Employers using an agent to file returns should also make sure employer/agent authorizations are up to date.

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EY Payroll News Flash