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September 30, 2021

Oklahoma reinstates charging COVID-19 UI benefits to employer SUI accounts; deposit of federal funds made to avoid employer SUI surcharge

The Oklahoma Employment Security Commission (OESC) recently announced that it resumed charging COVID-19 unemployment insurance (UI) benefits to employer state unemployment insurance (SUI) accounts effective beginning July 5, 2021. Through June 30, 2021, the OESC waived the charging of UI benefits to employer accounts for claims that were directly attributed to the COVID-19 pandemic. (EY Payroll Newsflash Vol. 21, #189, 4-24-2020.)

The 2022 SUI tax rates will be based on employer experience through the 2021 second quarter; therefore, the rate computation through June 30, 2021 will not include COVID-19 UI benefit payments. An OESC representative told us the agency anticipated that 2022 SUI tax notices would be issued in the last week of September 2021. (Email response to inquiry, OESC Compliance Enforcement Officer, Contributions Division/Employer Compliance, Rates/Wage Charging Unit.)

Deposits of federal COVID-19 funding made to the state's UI trust fund to avoid high employer surcharge

Oklahoma law requires that if the state UI trust fund balance falls to less than $25 million, employers will be assessed a quarterly fund-building surcharge as great as 33.3%. Oklahoma Governor Kevin Stitt directed that $100 million in CARES Act funds be allocated to the state's UI trust fund in October-November 2020, which averted the need for employers to pay the fund-building surcharge and helped to ensure the agency did not have to borrow from the federal government to continue to pay UI benefits. Another $20 million was subsequently deposited, according to the state's coronavirus relief fund expenditures website. (Oklahoma governor's 2020 year-end report, page 66.)

State legislation enacted (SB 789) in April 2021 allows the OESC during a declared state of emergency to claim up to 25% of federal emergency relief funds to reduce or eliminate the fund-building surcharge if the trust fund falls below $25 million in the future. Under the law, the agency may also allow the balance to remain at less than $25 million but not less than $10 million before the surcharge goes into effect. When a state of emergency is not in effect and has not had a direct impact of the UI trust fund, the OESC would be required to assess a fund-building surcharge sufficient to keep the trust fund balance at $25 million.

Employer 2021 SUI tax rates increased

The deposit of federal CARES Act funds into the state UI trust fund did not occur soon enough to prevent an increase to the Oklahoma 2021 SUI tax rates. For 2021, SUI tax rates range from 0.3% to 7.5%, up from 0.1% to 5.5%. (Oklahoma Employment Security Commission website.)

The new employer rate for 2021 remained at 1.5%.The 2021 SUI taxable wage base increased to $24,000, up from $18,700 for 2020.

Due to the effect of the COVID-19 pandemic on the state's trust fund balance, SUI tax rates are based on the highest rate schedule allowed by law (State Experience Factor 50%) and Conditional Factor D. Conditional factors kick in when the state's UI trust fund falls to a certain level.

In January 2021, an analysis by the state's Legislative Office of Fiscal Transparency (LOFT) indicated that the state's UI trust fund may need another $669 million to prevent a further increase in the SUI tax rates for 2022.

Another LOFT report on COVID-19 stated that over the course of 11 months (January 2020 to January 2021), the balance in the state's UI trust fund went from $1.1 billion to $237 million. As of July 31, 2021, the state's trust fund balance is $195,311,915.59. According to the federal Treasury Direct website, as of July 22, 2021, Oklahoma has not yet requested the option, if needed, to receive federal UI Title XII advances (UI loans).

For more information on SUI taxes, contact the OESC at +1 405 557 7222 or see the OESC's website.


Contact Information
For additional information concerning this Alert, please contact:
Workforce Tax Services - Employment Tax Advisory Services
   • Kristie Lowery (
   • Kenneth Hausser (
   • Debera Salam (


EY Payroll News Flash