April 6, 2021
New York 2021 SUI tax rates and wage base increased
The 2021 New York state unemployment insurance (SUI) tax rates range from 2.025% to 9.826%, up from 0.525% to 7.825% for 2020. The new employer rate for 2021 increased to 4.025%, up from 3.125% for 2020. All contributory employers continue to pay an additional 0.075% Re-employment Services Fund surcharge.
Due to the insolvency of the state's UI trust fund, 2021 SUI base rates are based on the Size of Fund Index, with the column heading of less than 0%. In addition, a subsidiary contribution rate is added to employer tax rates, ranging from 0.525% to 0.925%.
Taxable wage base to increase
The 2021 SUI taxable wage base increased to $11,800, up from $11,600 for 2020.
The SUI taxable wage base will continue to increase over the next several years until it reaches $13,000 in 2026. For each year thereafter, the SUI taxable wage base will be computed as 16% of the state's average annual wage. (2013–2014 budget bill AB 3007, Chapter 57, signed by the governor on March 29, 2013.)
Below is the schedule of increases for years 2022 through 2026:
2021 mailing of rate notices
According to a New York Department of Labor representative, the Department started mailing the 2021 SUI tax rate notices to employers in batches beginning the first week of March 2021, later than the usual February mailings. The 2021 SUI tax rates are also available electronically through employers' online services accounts. (Telephone conversation, New York Department of Labor representative, Employer Account Adjustment Section, March 23, 2021.)
Ernst & Young LLP insights
New York is one of 22 jurisdictions that applied for and was approved to receive federal unemployment insurance loans due to the impact of COVID-19 UI benefits on their UI trust fund balances. As of March 29, 2021, the U.S. Department of Treasury shows that New York has an outstanding federal UI loan balance of $10,391,599,985.32.
Failure to repay this federal UI loan balance by November 10, 2022 would result in a federal unemployment insurance (FUTA) credit reduction of 0.3% for calendar year 2022 and a corresponding increase in the FUTA taxes that New York employers pay.
Employers may also be required to pay surcharges to pay for the federal interest on the federal UI loan (though legislation (SB 3969) has been introduced to repeal the section of law that allows the Department to collect the surcharges).
For more information on SUI taxes, see the New York Department of Labor's website.
EY Payroll News Flash