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January 7, 2022
2022-0033

Preliminary state unemployment insurance tax facts for 2022 (as of January 6, 2022)

The chart that begins below shows the preliminary 2022 state unemployment insurance (SUI) taxable wage bases and rates for new employers; minimum and maximum SUI contribution rates for experienced employers; SUI employee contribution rates where applicable; and special surcharges.

As of January 6, 2022, nine states are reporting an increase in their 2022 base SUI tax rate schedules. More states would have increased their rate schedules but avoided that outcome because many of them deposited federal COVID-19 stimulus funds into their unemployment insurance (UI) trust funds and/or enacted legislation to reduce the impact on employer tax rates caused by the reduction in their UI trust funds. In addition, most states relieved employers of regular COVID-19 UI benefits during at least a part of the pandemic, further reducing the impact of these UI benefits on individual employer tax rates.

Under the Federal Unemployment Insurance Tax Act (FUTA), the 2022 federal unemployment insurance wage base is $7,000, the maximum tax is 6.0% and the maximum credit reduction is 5.4%, for a net FUTA deposit rate of 0.6%. The Virgin Islands has carried a federal UI loan balance since 2009, and a FUTA credit reduction has applied since 2011; accordingly, Virgin Islands employers paid FUTA tax at a rate of 3.9% for calendar year 2021.

Note that the hyperlinks below point to the state source for the SUI tax rate information. For states shaded in gray, the state has not yet officially published the 2022 rate information.

For an analysis of the impact of COVID-19 on employer unemployment insurance costs in 2021, see our special report.

Preliminary state unemployment insurance tax facts for 2022**

State

2022 taxable wage base

2022 range of SUI rates for merit-rated employers1

2022 rate for new employers6

2022 employee rate

2022 surcharge not reported on Form 940 2

2022 surcharge included in base tax rates and reported on Form 940

Alabama5

(Rate notices expected to be available in January 2022)

$8,000

1.09 -7.24%7

2.7%7

none

0.06%3, 7 (Employment Security Enhancement Assessment or ESA)

 

Alaska

(Rate notice mailed 12-1-2021)

$45,200á

1.0 -5.4%

varies

0.56%á

none

 

Arizona*5

(Rate notice mailed 12-30-2021)

$7,000

0.08 -20.93%á

2%

none

none

 

Arkansas*

(Rate notice was expected to mail by 12-31-2021)

$10,000

0.3-14.2%

3.1%

none

none

0.2%

(Stabilization tax)

California5

(Rate notice was mailed 12-31-2021)

$7,000

1.5 -6.2%

3.4%

none

0.1%3

(Employment Training Tax or ETT)

15% of base rate

(Emergency Surcharge)

Colorado*

(Rate notice is expected to mail by 1-17-2022)

$17,000á

0.75 -10.39%á

1.7% (building 1.86-7.58%)

none

none

 

Connecticut*5

(Rate notice was mailed 12-31-2021)

$15,000

1.9 -6.8%

3.0%

none

none

1.4%

(Fund balance tax rate)

Delaware*

(Rate notice is expected to mail by 1-30-2022)

$16,500***

0.3-8.2%7

1.8%7 (building rate varies)

none

0.095%3

(Special training tax assessment)

 

District of Columbia5

$9,000

1.9 -7.4%7

2.7%7

none

0.2%3,7

(Special training tax assessment)

 

Florida*5

(Rate notice is expected to mail after 1-1-2022, but before first quarterly return due date)

$7,000

0.1-5.4%7

2.7%7

none

none

 

Georgia5

(Rate notice was electronically available 12-28-21)

$9,500

0.04-8.1%7

2.64%

none

0.06%3, 7

(Administrative assessment)

 

Hawaii*

$51,600á

0.2%-5.8%

3.0%

none

0.01%3

(Employment and Training (E&T) Assessment Rate)

 

Idaho

(Rate notices are mailed each December)

$46,500á

0.24444-5.4%á

0.97%

none

3% of tax rate3

(Workforce Development Surcharge)

 

Illinois*

(Rate notice was mailed 12-1-2021)

$12,960

0.725-7.625%á

3.525% á

(no industry rates)

none

none

0.525%á

(Fund Building Rate)

Indiana*5

$9,500

0.5-7.4%7

2.5%7

none

none

 

Iowa

(Rate notices are mailed each November)

$34,800á

0-7.5%

1% (building 7.5%)

none

none

 

Kansas*5

(Rate notices are mailed each December)

$14,000

0.2-7.6%

2.7% (building 6%)

none

none

 

Kentucky*

(Rate notices were mailed 12-10-2021)

$11,100á

0.5%-9.5%á

2.7% (building 9.5%)

none

The 0.075% Service Capacity Upgrade Fund Tax (SCUF) is again suspended for 2022

 

Louisiana*

(Rate notices are mailed by December 31)

$7,700

0.09-6.2%

varies

none

varies4

(Incumbent Worker Training Program and Integrity Social Charge Fund rates)

 

Maine*5

(Rate notice was mailed 12-17-2021)

$12,000

0.53-6.16%á

2.24%á

none

0.07%3

(Competitive Skills Scholarship Fund or CSSF)

0.14%3á

(Unemployment Program Administrative Fund or UPAF)

 

Maryland*5

(Rate notices are expected to mail after 1-15-2022 but not later than 1-31-2022)

$8,500

1-10.5%

2.6% (building 7.0%)7

none

none

 

Massachusetts*5

$15,000

0.94-14.37%7

2.42% (building 6.89%)7

none

0.056%3, 7

(Workforce Training Fund or WTF)

10.5% of tax rate3,7

(COVID-19 Recovery Assessment Rates)

1.12%3,7

(Solvency rate)

Michigan*

(Rate notices were expected to mail by 1-3-2022)

$9,500

0.06-10.3%7

2.7%

(building 6.0%)7

none

none

 

Minnesota*

(Rate notices were mailed 12-15-2021)

$38,000á

0.57-10.716%á

varies

none

0.1%

(Workforce Development Assessment)

1.8%3 â

(Federal interest assessment)

14% of employer base rate

(Additional assessment)

Mississippi*5

$14,000

0.0-5.4%7

1%, 1.1%, 1.2%

none

0.2%3,7

(Workforce investment, Mississippi Works, and Workforce Enhancement Training surcharges)

 

Missouri*

(Rate notices were mailed 11-30-2021)

$11,000

0-5.4%

2.376% (nonprofit/ public 1%)

none

None

-12% of employer base rate

(Contribution Rate Assessment or CRA)

.25% to 1.00%

(Maximum rate surcharge)

Montana

(Rate notices were mailed 12-21-2021)

$38,100á

0-6.12%

Varies (1.3%-2.3%)

none

0.13%-0.18%4

(Administrative Fund Tax or AFT)

 

Nebraska*5

(Rate notices were mailed 12-10-2021)

$9,000/

$24,000

0-5.4%

1.25% (building 5.4%)

none

5% of rate3

(State unemployment insurance tax (SUIT) surcharge)

 

Nevada

(Rate notices are typically mailed each December)

$36,600á

0.25-5.4%

2.95%7

none

0.05%3,7

(Career Enhancement Program (CEP) surcharge)

 

New Hampshire*5,8

(Rate notices for fiscal year 2022 were mailed on 8-26-2021)

These rates are through the 2022 first quarter. Rates may change each quarter.

$14,000

0.1-8.5%

2.7%

None

0.4%3

(Administrative Surcharge or AC)

1.5% on negative balanced employers

(Inverse rate surcharge)

0.00%

(Emergency Power Surcharge)

0.00%

(Fund Balance Reduction)

New Jersey*8

(Rate notices for fiscal year 2022 were mailed on 8-19-2021)

$39,800á

0.5-5.8%á

2.8%

0.425%

0.1%4

(Workforce Development Fund)

0.0175%4

(Supplemental Workforce Fund)

 

New Mexico*

(Rate notices were mailed on 11-20-2021)

$28,700á

0.33-6.4%

1% (or industry average if higher) 7

None

None

 

New York*

(Rate notices are typically mailed in late February or early March)

$12,000á

0.525-7.825%7 â

3.125%7 â

None

0.075%3,7

(Reemployment Services Fund Surcharge)

 

North Carolina*

(Rate notices were mailed on 12-15-2021)

$28,000á

0.06-5.76%

1%

None

none

 

North Dakota*

(Rate notices were mailed on 12-8-2021)

$38,400â

0.08-9.69%

1.02%, 6.09% (building 9.69%)

None

none

 

Ohio*5

(Rate notices were mailed on 12-1-2021)

$9,000

0.8-10.2%á

2.7% (building 5.5%â)

None

none

0.5%

(Mutualized rate)

Oklahoma*

(Rate notices were mailed on 9-30-2021)

$24,800á

0.3-7.5%

1.5%

None

5% of tax rate

(OESC technology fund diversion)

 

Oregon*

(Rate notices were mailed on 11-15-2021)

$47,700á

0.9-5.4%â

2.4%â

none

0.09%3

(Special Payroll Tax Offset)

 

Pennsylvania5

(Rate notices were mailed on 12-31-2021)

$10,000

1.2905-9.9333%

3.689% (building 10.2238%)

0.06%

0.00%

(Interest tax factor for bonds sold to repay the federal UI loan)

 

Puerto Rico*

$7,000***

1.2-5.4%7

2.8%7

none

 

1%3

(Special tax)

Rhode Island*

(Rate notices are expected to mail by 1-15-2022)

$24,600/

26,100

0.99-9.59%

0.98%á

none

0.21%3

(Job Development Fund or JDF)

 

South Carolina*

(Rate notices were mailed on 11-12-2021)

$14,000

0-5.4%

0.49%

none

0.06%3

(Contingency Surcharge)

0.00%3

(Solvency Surcharge)

 

South Dakota*

(Rate notices were mailed on 10-29-2021)

$15,000

0-9.3%

1.2%,1.0% (building 6%,3%)

none

0.02%3

(Administrative Fee Surcharge)

0-0.55%3

(Investment Fee)

 

Tennessee*8

(Rate notices for fiscal year 2022 were mailed in August 2021)

$7,000***

0.01-10%

2.7% (no special industry rate)

none

none

 

Texas*5

(Rate notices are expected to mail the week of 1-10-2022)

$9,000

0.31-6.31%7

2.7% (or industry average if higher)

none

0.10%3

(Employment & Training Investment Assessment)

0.01%3

(Bond Obligation Assessment Rate)

 

Utah*

(Rate notices mailed on 11-19-2021)

$41,600á

0.3-7.3%á

1.0-7.3%á

none

none

 

Vermont* 8

(Rate notices were mailed in the first week of July (but were dated 6-24-2021)

$15,500á

0.8%-6.5%á

1% (varies for certain industries)

none

none

 

Virgin Islands*

24 V.I.C. § 308

$30,800â

1.5-5.4%7

2%

none

$25 per employee

 

Virginia*5

(Rate notices are typically mailed by the end of January)

$8,000

0.33-6.43%7

2.73%

none

none

 

Washington*

(Rate notices mailed on 12-29-2021)

$62,500

0.30-6.0%7á

115% of the industry average and a minimum of 1.0%

none

0.03%3

(Employer Administrative Fund or EAF)

 

West Virginia5

(Rate notices mailed on 12-10-2021)

$12,000

1.5-8.5%

2.7% (building 8.5%)

none

none

 

Wisconsin*5

(Rate notices are typically mailed in mid-October)

$14,000

0.0-12% (small employer); 0.05-12% (large employer)

3.05% (small employer)

3.25% (large employer)

(building 2.5%, 2.7%)

none

none

Solvency rate varies

Wyoming*

(Rate notices are typically mailed by December 31)

$27,700á

0.09-8.5%7

varies

none

0.15%3

(Employment Support Fund Factor)

 

Footnotes:

* See state-specific note below.

** Survey results as of December 2021. Much of the information in this survey was obtained through review of state revenue/workforce department administrative guides or informational telephone or email surveys with state governmental agencies. Although state administrative guides and telephone and email surveys are useful in determining how government departments currently treat an issue, answers and positions derived from such sources are not binding upon the state, cannot be cited as precedent, may change over time and hence cannot be relied upon.

*** Estimated wage base. Final wage base not yet published by the state.

Increase from prior year

Decrease from prior year

(1) This is the base SUI tax rate that is eligible for the 5.4% federal unemployment insurance (FUTA) tax credit and is reported on Form 940 as a state contribution. This rate does not include surcharges that are not eligible for the 5.4% FUTA credit.

(2) Additional surcharges are those rates that are not certified to the federal government as employer unemployment taxes for Form 940 purposes. Unless otherwise noted, the surcharge is in addition to the range of UI rates for merit-rated employers shown in the third column. Certain employers (i.e., maximum-rated) may be exempt from the surcharge. For states that have borrowed from the federal government, an additional surcharge for payment of interest may apply.

(3) The surcharge is shown separately on the quarterly contribution report (or billed on a separate notice).

(4) The surcharge is combined with the unemployment tax rate on the quarterly contribution report. Deduct the surcharge when completing the Form 940 worksheet.

(5) The wage base is set by law. Legislation is needed to change it.

(6) "Building" refers to the construction industry.

(7) 2022 SUI tax rate is not yet available.

(8) The state's SUI tax rates are in effect July 1 through June 30

Arizona

Effective January 1, 2023, legislation (SB 1828/Chapter 412) will increase the SUI taxable wage base to $8,000, up from $7,000. This increase is intended to fund the rise in the maximum weekly UI benefit amount, which effective July 1, 2022, will increase to $320, up from $240.

Arkansas

As a result of 2021 legislation (HB 1409/Act 368), the SUI taxable wage base for calendar year 2022 will remain $10,000, the same as it was in 2021. Absent this legislation, and due to the continuing effect on the state's UI trust fund of the COVID-19 pandemic, the SUI wage base could have increased to $11,000 or $12,000 for 2022.

Colorado

SB 20-207 provides that the SUI taxable wage base will increase incrementally to $30,600 by calendar year 2026.

Under the legislation, the variable SUI taxable wage base 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.

The highest of seven rate schedules by law will be used to compute experience-rated employer tax rates for 2022; however, the 2022 tax rates will continue to consist solely of the base tax rates found in Colorado unemployment law (under the column heading "Reserve Ratio .000 to Deficit"). Due to SB 20-207, there are no fund-building surtaxes or additional rates added to the 2022 SUI base tax rate.

Issuance of the 2022 tax rate notices is delayed. As a result, employers that wish to protest the individual employer account information used in computing their 2022 tax rate may file a protest during the period of January 17, 2022 to February 7, 2022.

Connecticut

2021 HB 6633/Public Act 21-200 increases the taxable wage base for calendar year 2024 to $25,000, up from the current $15,000 and makes other changes to Connecticut's UI law. Beginning with calendar year 2025, the taxable wage base will be indexed each year for inflation. HB 6633 also, for calendar year 2024, expands the base rate schedule and reduces the fund solvency tax rate.

Other 2021 legislation (HB 5377/Public Act 21-5) requires that future tax rate computations not include UI benefit charges or taxable wages for the fiscal years ending June 30, 2020 and June 30, 2021. Similarly, the statewide benefits and taxable wages for calendar years 2020 and 2021 will be disregarded when calculating the 2022 tax rate that will apply to new employers. The legislation is effective the computation of tax rates for tax years beginning January 1, 2022.

Delaware

2013 legislation (HB 168) increased the SUI taxable wage base to a minimum of $10,500 and a maximum of $18,500 by linking the wage limit to the balance of the state's unemployment trust fund. The higher the trust fund balance, the lower the taxable wage base.

Florida

2021 SB 50 directs that the 2022—2025 tax rates be calculated without applying the fund balance adjustment factor. SUI tax rate calculations for 2021—2025 will also exclude UI benefit charges from the second, third and fourth quarters of 2020 and all benefit charges paid as a direct result of a government order to close or reduce capacity of a business due to COVID-19, as determined by the DEO. Also, UI benefit charges from the first and second quarters of 2021 may be decreased if EDR estimates total tax collection for rate year 2022 will exceed $475.5 million. Changes to the 2023—2025 SUI tax rate calculation are repealed if the trust fund reaches $4,071,519,600 on June 1.

SB 50 also required the state make three deposits during 2021 to the UI trust fund balance. The funding comes from online sales tax collected from out-of-state e-commerce companies as required under SB 50. In addition, beginning July 2022, and on or before the 25th day of each of the following months, the DOR will distribute $90 million monthly to the state's UI trust fund. The Department is required to end monthly distributions when the DOR receives certification from EDR that the ending balance of the UI trust fund exceeds $4,071,519,600 or on December 31, 2025, whichever is earlier.

Hawaii

2021 legislation (HB 1278/Act 1) froze the employer SUI tax rates for 2021 — 2022 at Rate Schedule D, rather than issuing SUI tax rates at Rate Schedule H, the highest schedule provided for under state law. The legislation also results in a lower new employer rate for 2021 — 2022 of 3.0%, rather than 5.2% under Rate Schedule H. Finally, HB 1278 requires that all UI benefits paid out during the pandemic be omitted when calculating the 2021—2022 tax rates.

Illinois

The Fund Building Rate (a flat addition) increased to 0.525% for 2022, up from 0.475% for 2021. (Historical rate chart, 2012—2022.)

Legislation enacted in 2020 (HB 2455) holds the increase to the State Experience Factor for 2022 to 16% above 2021's factor; as a result, the 2022 factor is held at 111% (up from 95% for 2021). Normally the factor would have been held at 22% over 2021, which would have made the factor 116% for 2022. Had no limiter been provided for under Illinois law, the factor would have been 227%. Experience-rated employers whose contribution rate is higher than 5.400% and whose total quarterly wages are less than $50,000 pays contributions at 5.4% in that quarter.

Indiana

Legislation enacted in 2020 (HB 1111), sets a new SUI series of rate schedules in the state's UI law, beginning calendar year 2021. However, for calendar years 2021—2025, the bill freezes employer basic SUI contribution rates (under new basic Rate Schedule C) to within the same range of basic rates as were in effect for calendar years 2011—2020 (under previous basic Rate Schedule E). As a result, employer basic SUI tax rates continue to range from 0.5% to 7.4% for 2021. Under 2021 HB 6633, relief from UI benefit charges will be provided by crediting back to the employer's experience balance account any UI benefits charged to employers between March 13, 2020 and June 30, 2021 before the 2022 rate assessments are calculated. Calendar year 2020 relieved charges may be mutualized for calendar year 2022 rating purposes. Calendar year 2021 relieved charges may be mutualized for calendar year 2023 rating purposes.

Kansas

2021 legislation (HB 2196), effective for tax year 2022, replaces the previous tax rate schedules with 13 new rate schedules geared toward restoring and maintaining UI trust fund solvency. The law also requires that the state deposit $250 million in federal COVID-19 relief funds into the state's UI trust fund by July 15, 2021 and July 15, 2022, in an effort to limit the effect COVID-19 has had on the fund's balance. The law sets the 2022 tax rate schedule at new Standard Rate Schedule 7, with SUI tax rates ranging from 0.2% to 7.6%, and requires that no solvency credit or adjustment will apply.

Kentucky

According to an UI tax representative, Rate Schedule C will be in effect for 2022. The taxable wage base is expected to continue to increase by $300 each calendar year until it reaches $12,000. For calendar years 2021—2022, the diversion of 0.075% to the service capacity upgrade fund (SCUF) is suspended due to the condition of the state's UI trust fund balance. As a result, employers will be given full credit for their 2021—2022 SUI contributions. (Email response to inquiry, 12-20-2021.)

Louisiana

2021 legislation (SB 89/Act 91) requires that the taxable wage base remains at $7,700 for 2022. The Louisiana State Legislature adopted a resolution in October 2020 (SCR 9 — 2020 second extraordinary session) that suspended for 2021 the UI law provision that requires that a solvency tax of up to 30% be added to employer tax rates when the UI trust fund balance falls below $100 million. 2021 Resolution SCR 5 extends the suspension of the solvency tax through the 60th day following the end of the 2022 regular legislative session.

Maine

The Unemployment Program Administrative Fund (UPAF) was created in 2021 to ensure adequate funding for the state's UI program (2019 Chapter 616). For 2022, the rate is 0.14%, up from 0.13% in 2021. This surcharge is not credited to employer accounts as SUI taxes and should not be used when calculating federal unemployment (FUTA) liability.

Maryland

Legislation (SB 811/Chapter 73) required that Maryland Governor Larry Hogan deposit enough federal relief funds into the state's unemployment insurance (SUI) trust fund to ensure that Rate Schedule C, the midway point of SUI rate schedules under the state UI law, be in effect for calendar year 2022. The bill also requires that Rate Schedule C be used for calendar year 2023. SUI tax rates on Rate Schedule C range from 1.0% to 10.5%, down from 2.2% to 13.5% on Table F for 2021. Although 2021 SUI tax rates were assigned using the highest rate schedule per law, to attempt to mitigate the effect of COVID-19 UI benefit charges on employers, the 2021 tax rates were based on employer experience through July 1, 2019, instead of July 1, 2020. (Governor's news release.)

Massachusetts

Legislation (HB 90, 2021 Chapter 9) froze the 2021—2022 employer SUI tax rate schedule at the same as was in effect for 2020 (Schedule E).

In accordance with legislation enacted on May 28, 2021, the Department of Unemployment Assistance (DUA) removed COVID-19 related charges from the solvency fund and charged them to a newly created account: the COVID-19 Employer Relief Account.

As a result, the 2021 solvency rate decreased from 9.23% to 1.12%. To account for the reduction in solvency rate, employers that were charged a solvency assessment on their 2021 rate notice will be credited back a portion of the solvency assessment to their account's experience-rating reserve balance, resulting in an adjusted 2021 UI rate. Adjusted 2021 UI rates are retroactive to January 1, 2021. (Massachusetts Labor and Workforce Development letter, 7-15-2021. )

Michigan

Starting in 2021, and continuing for 2022, the SUI taxable wage base increased to $9,500 for all employers, up from the $9,000 that had been in effect for the past several years for non-delinquent employers ($9,500 was assigned to delinquent employers). This was because Michigan's UI trust fund balance fell below $2.5 billion on June 30, 2020 and 2021.

Minnesota

The 2022 tax rates will increase substantially due to the condition of the state's UI trust fund. Per Minnesota law, the base tax rate, and whether an additional assessment will be in effect, for any year is determined by the balance in the UI Trust Fund on March 31 of the previous year. Because the trust fund was insolvent on March 31, 2021, the base tax rate for 2022 will be 0.50%, up from 0.1% for 2021 and there will be an additional assessment of 14% on the amount of SUI tax owed. The 0.5% base rate and the additional assessment of 14% were last in effect in 2013. SF 192, Ch. 2 froze the 2021 tax rates to those assigned to employers for 2020.

Mississippi

2020 SB 3051 reduced the general experience rate to 0% for calendar year 2021, with SUI rates ranging from 0.0% to 5.4%. The legislation also provides that UI benefit charges paid out for the period of March 8, 2020 to June 30, 2020 would be omitted when calculating the 2021—2023 tax rates; and that UI benefit charges paid out for the period of July 1, 2020 through December 31, 2020, would be omitted when calculating the 2022—2024 tax rates. The combined state workforce investment, Mississippi Works, and Workforce Enhancement Training surcharge continued at 0.2%.

Missouri

Public Notice and Order 20-19 limited the calculation of the contribution rate adjustment (CRA)'s effect on employer 2022 SUI tax rates. A CRA is a percentage increase or decrease to the base SUI tax rate schedule that is based on the average balance of the state's UI trust fund. Each year, SUI tax rates may be based solely on the base rate schedule; increased by 10%, 20% or 30%; or reduced by 7% or 12%. For calendar years 2021 and 2022, the CRA is a -12%, the lowest rate schedule allowed by law. Normally, the average UI trust fund balance for four quarters determines the CRA. Due to Order 20-19, the state only looked at the trust fund balance for the second and third quarters of 2021 to determine the CRA for 2022. The 2022 base rates have been computed as normal, only the CRA computation is affected. This allows the state to partially exclude the effect of COVID-19 on the UI trust fund balance on employer SUI tax rates for 2022.

Nebraska

2019 legislation (LB 428) increased the SUI taxable wage base to $24,000 for employers assigned the maximum rate. This change was effective for calendar year 2020. The taxable wage base remains $9,000 for all other employers.

New Hampshire

The first, second, third and fourth quarters 2021 tax rates for positive-balanced employers do not include the 0.5% emergency power surcharge that was in effect for third and fourth quarter 2020. This reduction is the result of a previous deposit of CARES Act funds into the state's UI trust fund. This also forestalled the need to increase the emergency power surcharge to 1.0% as of the fourth quarter 2020.

As a result, positive-balanced employers' SUI tax rates ranged from 0.1% to 2.7% on basic Rate Schedule I for first, second, third, and fourth quarters 2021. New employers paid at a basic SUI tax rate of 2.7%. These rate changes were reflected on employers' 2021 quarterly SUI tax returns.

Negative-balanced employers continued to be assessed the inverse rate surcharge of 1.5% which was added to their base rate for third and fourth quarter 2020 and first, second, third and fourth quarters 2021. As a result, employers that have been negatively balanced for three or less years had SUI tax rates ranging from 4.3% to 8.0% on Rate Schedule II. Employers that had a negative account balance for four or more years were assigned SUI tax rates on Rate Schedule III, with rates ranging from 4.8% to 8.5%.

New Jersey

Employee contribution rate includes the Workforce Development/Supplemental Workforce Funds surcharge. AB 4853, enacted in 2020, reduces the effect of regular state COVID-19 UI benefits on New Jersey employer SUI tax rates starting fiscal year 2022 through FY 2024 by preventing the move to a higher SUI rate schedule over the subsequent three fiscal years, something that had been anticipated due to the reduction in the state's UI trust fund from COVID-19 UI benefit payouts.

Absent AB 4853, 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:

  • For fiscal year 2022 (July 1, 2021 to June 30, 2022) the assignment of SUI tax rates moved from the FY 2021 Rate Schedule B, with rates ranging from 0.4% to 5.4%, to Rate Schedule C, with rates ranging from 0.5% to 5.8%.
  • For fiscal year 2023 (July 1, 2022 to June 30, 2023) the assignment of SUI tax rates will move from Rate Schedule C to Rate Schedule D, with rates ranging from 0.6% to 6.4%.
  • For fiscal year 2024 (July 1, 2023 to June 30, 2024) the assignment of SUI tax rates will move from Rate Schedule D to Rate Schedule E, with rates ranging from 1.2% to 7.0%.

New Mexico

Legislation enacted during the state's first 2020 special session (SB 3/Chapter 6) mandated that COVID-19 UI benefits paid during the period of March 1, 2020 through June 30, 2021 be omitted from the calculation of employers' base 2021—2022 SUI tax rates, excess claims premiums and excess claims rates.

SB 3 also provided that the reserve factor used in the computation of the 2021 employer SUI tax rates was frozen at the same figure as was used for calendar year 2020. Over 50,000 contributory employers had their 2021 SUI tax rate reviewed and recalculated omitting UI benefit charges, taxable wages and contributions for the period of March 1, 2020 through June 30, 2020. Revised rate notices were issued to employers. The recalculations were the result of reports of large percentage increases in the original 2021 SUI experience tax rates.

A New Mexico Department of Workforce representative confirmed that the base SUI tax rates for 2022 will continue to range from 0.33% to 6.4% for experience-rated employers and from 1.0% to 1.31% for new employers. New employers pay at the rate of 1.0% or the industry average, whichever is greater. A "reserve factor" is multiplied by the individual experience-rated employer's benefit ratio and used to determine the employer's total tax rate. The reserve factor has not yet been released by the Department. Tax rate notices are typically issued in November for the following calendar years. (Email response to inquiry, 10-12-2021.)

North Carolina

The revised 2021 North Carolina SUI tax rates continue to range from 0.06% to 5.76%. The new employer rate remains at 1.0%. (Email response to inquiry, 12-21-2021.)

2021 legislation (SB 311/Ch. SL 2021-178) freezes the base contribution rate, one of the factors used to calculate an employer's unemployment insurance tax rate for the year, at 1.9% for 2022. Legislation enacted earlier in 2021 (SB 114/SL 2021-5) also set the base rate at 1.9%, down from 2.4%, resulting in revised 2021 tax rates for most experience-rated employers. The base contribution rate is one of the factors used to calculate an employer's SUI tax rate for the year.

Ohio

2016 legislation (SB 235) increased the SUI taxable wage base to $9,500 for calendar years 2018 and 2019. The taxable wage base reverted to $9,000 effective January 1, 2020 and will remain at that amount unless changed by future legislation.

Oklahoma

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 (SB 789) enacted 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.

The diversion of 5% of employers' tax rates continues for 2021 and 2022, proceeds going to the OESC technology fund to allow the agency to modernize its business processes and technology. The diversion is in effect for calendar years 2018—2022. Employers assigned the maximum SUI tax rate are not subject to this diversion.

Oregon

HB 3389, enacted in 2021, requires that SUI tax rates for calendar years 2022 through 2024 be computed using the same employer experience that was used to determine the SUI tax for calendar year 2020, the period before the COVID-19 emergency began.

HB 3389 also extends the lookback period used to determine the UI trust fund solvency level from 10 years to 20 years, provides that calendar years 2020 and 2021 will be omitted from the lookback period and makes other changes designed to permanently lower the UI trust fund balance, statewide tax schedule, and employer SUI tax rates.

Puerto Rico

2017 legislation grants the territory's Secretary of Labor the discretion to increase the taxable wage base to as much as $10,500 if deemed necessary.

Rhode Island

To help prevent an increase in taxes for Rhode Island employers, Governor Dan McKee issued Executive Order 21-102 providing the Department with flexibility in deciding the calculation date for the new tax rates. This allowed for the UI trust fund to accumulate a sufficient balance before the new rates were calculated in November.

As a result of Executive Order 21-102, Schedule H with rates ranging from 1.2% to 9.8% will remain in effect throughout calendar year 2022. The rate for new employers, which is based on the state's five-year benefit cost rate for new employers, will be 1.19%. These rates include the 0.21% Job Development Assessment.

Governor McKee also issued Executive Order 21-117, allowing the Department to hold the UI taxable wage base at the same level as it was in 2021. Accordingly, in 2022 the UI taxable wage base for most Rhode Island employers will remain at $24,600. For those employers at the highest tax rate, the UI taxable wage base will be set $1,500 higher at $26,100. (Rhode Island Department of Labor & Training news release.)

South Carolina

Due to a 2020 transfer of federal CARES Act funds to the state's UI trust fund, and because the trust fund had a balance of approximately $1.19 billion as of the rate computation date, employer tax rates will continue to be based on the same rate schedule as for 2020 and 2021 and there will be no solvency surcharge added to employer tax rates.

South Dakota

2022 SUI tax rates were provided via email from the South Dakota Department of Labor.

Tennessee

Under Tennessee UI law, if the UI trust fund balance on December 31 of any year is less than $900 million, the taxable wage base is $9,000. If the trust fund balance is above $900 million, but less than $1 billion on December 31, the taxable wage base is $8,000. If the trust fund balance is over $1 billion on December 31, the taxable wage base is $7,000. If the SUI trust fund balance continues to exceed $850 million as of December 31, 2021, SUI tax rates will continue to range from 0.01% to 10.0% on Premium Rate Table 6 for the first two quarters of 2022.

Texas

On November 23, 2021, the Texas Workforce Commission (TWC) announced that the 2022 tax rates would be set at a stable level to avoid a significant increase over 2021. This action is a result of the statutory authority of the TWC and was supported by funding from SB 8, passed during the 3rd 2021 Special Session of the legislature.

SB 8 also authorized the appropriation of roughly $7.2 billion for deposit to the state's UI trust fund to pay off the state's federal UI trust fund loan and return the UI trust fund to a level to hold the 2022 tax rates steady.

Per the TWC, these rate factors will be in effect for 2022:

  • UI replenishment tax rate of 0.20%
  • obligation assessment of 0.01% (the obligation assessment was set to 0.01% for the recovery of federal interest due on federal Title XII loans)
  • deficit tax rate of 0.0%

According to a TWC tax representative, the 2022 tax rate notices are expected to be mailed to employers during the week of January 10, 2022.

Utah

2021 HB 2002 held the social cost rate factor for 2022 to 0.3%. For 2023—2024, the social cost rate factor will be held to not more than 0.4%. HB 2002 also held the reserve factor to 1.15 for 2022, and to not more than 1.2 for 2023—2024. Legislation (SB 5007) enacted in 2020 held the social cost rate to 0.2% for 2021. Utah SUI tax rates are calculated by the following formula: Employer benefit ratio X reserve factor + social cost.

Vermont

2021 legislation (SB 62/Act 51) lessened the impact that COVID-19 UI benefits had on the fiscal year 2022 SUI tax rates by disregarding all UI benefits from calendar year 2020 when the individual SUI tax rates were calculated. The law further requires that calendar year 2021 UI benefits under certain COVID-19-related circumstances will not be used in calculating tax rates for fiscal year 2023 and later.

To be eligible for relief of regular COVID-19 UI benefit charges for 2021, employers must request relief of these charges using this form and submitting the form electronically here.

SB 62 required that UI benefit charges for calendar year 2020 not be used in the computation of the "current fund ratio" and the "highest benefit cost rate," factors used to determine which of the five rate schedules provided for by law will be in effect for the next fiscal year.

Virgin Islands

Legislation (2019 Bill No. 33-0090) changed the method of determining employer SUI tax rates from a flat 2.5%, assigned to most employers, to a payroll variation system which is similar to Alaska's rating system. Additionally, a fund solvency rate may be added to the base rate, which will be based on the solvency of the territory's UI trust fund.

Virginia

Under budget legislation (HB 7001), enacted during Virginia's 2021 second special legislative session, calendar year 2022 tax rates must be computed without all regular UI benefits charged for the period of April 1, 2020 through June 30, 2021. In addition, employer 2022 SUI tax rates (and the pool charge portion of the tax rate) cannot exceed the SUI tax rates assigned to individual employers for calendar year 2021. HB 7001 also requires that $862 million be deposited in the state's UI trust fund.

Had HB 7001 not been enacted, the Virginia Employment Commission estimated that the 2022 SUI tax rates could have increased four-fold.(News release, news release, governor's office; Virginia Employment Commission UI trust fund projection 6-2021.)

Washington

2021 SB 5061 reduced the 2021 SUI tax rates for experience-rated employers; and revised 2021 SUI tax rate notices were issued in late February 2021. The average SUI experience tax rate for 2021 went down to 1.06% (a 38% tax cut).

Additionally, under SB 5061, the computation of the "graduated social cost factor" portion of employer SUI tax rates, which is based on costs from the previous year for benefit payments that can't be attributed to specific employers, was based on a flat multiplier of 0.5% for 2021; and will be not more than 0.75% for 2022; 0.8% for 2023; 0.85% for 2024; and 0.9% for 2025.

SB 5061 (and, for 2021, the governor's Executive Order 20-81) also suspends the assessment of a solvency surcharge of 0.2% for tax years 2021—2025. The surcharge is assessed when the balance of the state UI trust fund as of the September 30 preceding the tax year is insufficient to pay seven months of UI benefits.

The changes in computing employer SUI tax rates were projected to prevent a cost increase to employers of over $921 million for 2021 and $1.7 billion overall from 2021 through 2025.

2021 SB 5478 establishes a UI Relief Account and provides tax rate relief to certain categories of employers, go here for a description of the relief available to certain employers.

West Virginia

Within Governor Jim Justice announcement regarding the repayment of the state's federal UI loan, he stated that employers are predicted to save 25% in 2022. According to a senior Workforce West Virginia representative, to achieve the 25% savings in 2022, Governor Justice intends to reduce the SUI taxable wage base from $12,000 to $9,000, which would require legislation to implement. (Email response to inquiry, 9-27-2021.)

Wisconsin

2021 AB 406/Act 59 mandates that Rate Schedule D, the lowest by law, be used for calendar years 2022—2023. The Act also required that $120 million in appropriations be transferred to the state's UI trust fund for the biennium budget years of 2021—2023.

Wyoming

Executive Order (EO) 2021-08 supersedes a previous executive order regarding the non-charge to employer accounts of COVID-19 UI benefits. Under the new order, all UI benefits paid to UI benefit claimants for the period of March 13, 2020 to December 31, 2020 were not charged to employer accounts, not just those that were attributable to COVID-19.

Executive Order 2021-08 also allows for an additional $58 million in federal COVID-19 relief money to be deposited into the state's UI trust fund, if needed to ensure that employer SUI tax rates not increase for 2022 and that the trust fund continues to be solvent. (Governor Gordon's news release, 10-15-2021; EO 2021-08, superseding EO 2020-12; governor's executive order webpage.)

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

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