August 30, 2021 New Jersey fiscal year 2022 SUI tax rates increase due to COVID-19 benefit claims The New Jersey Department of Labor and Workforce Development announced that fiscal year 2022 (July 1, 2021 to June 30, 2022) state unemployment insurance (SUI) tax rates range from 0.5% to 5.8% on Rate Schedule C, up from a range of 0.4% to 5.4% on Rate Schedule B for fiscal year 2021 (July 1, 2020 to June 30, 2021). The new employer rate remains at 2.8% for FY 2022. The fiscal year 2022 tax rates continue to include the 0.1% Workforce Development Fund rate and the 0.0175% Supplemental Workforce Fund rate. (New Jersey Department of Labor & Workforce Development website.) SUI taxable wage base The employer taxable wage base will continue at $36,200 for the remainder of calendar year 2021. The 2022 taxable wage base and other 2022 SUI rates and limits have not yet been announced. Once released, other 2022 SUI information will be posted here. FY 2022 rate notices Employer tax rate notices are now available via the Employer Access system and were mailed to some employers by August 19, 2021. Experience-rated employers have the option to make a voluntary contribution to lower their assigned SUI tax rate within 30 days of the rate notice mailing date. Law reduces impact of COVID-19 UI benefits on SUI tax rates over next three fiscal years AB 4853 reduces the effect of regular state COVID-19 unemployment insurance (UI) benefits on New Jersey employer SUI tax rates starting fiscal year 2022 through FY 2024. (New Jersey's fiscal year for SUI tax rating purposes is July 1 through June 30.) AB 4853 prevents moving to a higher SUI rate schedule over the next three fiscal years, something that had been anticipated due to reduction in the state’s UI trust fund from COVID-19 UI benefit payouts. It is estimated that the highest rate schedule, Schedule E+, would have been in effect for fiscal year 2022, with rates ranging from 1.3% to 7.7%. Following are the maximum SUI tax rate ranges under AB 4853:
The law provides that if calculation of the actual fund reserve ratio would result in the selection of a rate schedule with lower contribution rates than those above for fiscal years 2022 through 2024, the lower rate schedule will apply. For more on the New Jersey SUI rate schedules, go here. Ernst & Young LLP insights New Jersey 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; however, the taxable wage base for these states is assigned on a calendar-year basis. As of August 13, 2021, the US Department of Treasury shows that New Jersey has an outstanding federal UI loan balance of $117,158,492.64. Failure to repay the federal loan balance by November 10, 2022, would result in a FUTA credit reduction of 0.3% for calendar year 2022. ———————————————
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