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July 17, 2020
2020-1831

Colorado incrementally increases the SUI taxable wage base, provides SUI solvency assessment relief for two years and adopts other measures to combat COVID-19 impact

Colorado recently enacted SB 20-207, providing that the employer state unemployment insurance (SUI) taxable wage base will increase incrementally to $30,600 by calendar year 2026.

The variable SUI taxable wage base ($13,600 for 2020) will be set at:

  • $13,600 for 2021
  • $17,000 for 2022
  • $20,400 for 2023
  • $23,800 for 2024
  • $27,200 for 2025
  • $30,600 for 2026, as adjusted by changes in the annual average weekly wage

Counterbalancing the increase in taxable wage base, the bill requires that employers not be assessed a solvency surcharge for calendar years 2021–2022, even if the state UI trust fund balance falls low enough to warrant this increase in the SUI tax rates.

The bill also allows the state to use funds under received by the U.S. Department of Labor under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to bolster the state UI trust fund, which is projected to have a deficit of approximately $2 billion by the end of fiscal year 2021. This move can help to lower the overall future-assigned SUI tax rates.

SB 20-207 also provides for UI benefit law changes

The bill also provides for UI benefit law changes, including increasing the amount of wages claimants may earn before affecting their weekly UI benefit amount from 25% to 50% of the weekly UI benefit amount. The bill also provides reasons a claimant collecting COVID-19 UI benefits may refuse an offer to return to work, such as having to care for a sick family member, having a child home from school because the school is closed, or having a health condition that could cause the employee to be more susceptible to illness or disease.

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Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Tax Services - Employment Tax Advisory Services
   • Kenneth Hausser (kenneth.hausser@ey.com)
   • Debera Salam (debera.salam@ey.com)
   • Kristie Lowery (kristie.lowery@ey.com)
   • Peter Berard (peter.berard@ey.com)

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