February 23, 2022
Nebraska delays due date of 2021 fourth-quarter SUI return and tax payment; 2022 SUI wage base unchanged and tax rates slightly lower
The Nebraska Department of Labor announced on January 21, 2022 that the 2021 fourth-quarter state unemployment insurance (SUI) quarterly return and payment deadline is extended from January 31, 2022 to February 28, 2022.
The Department extended the deadline to give employers time to adapt to its new modernized unemployment insurance tax system, which launched on December 6, 2021. Under this new system, Nebraska employers may now file their quarterly tax and wage reports at NEworks.nebraska.gov.
Instructions for making payments and filing reports are available at dol.nebraska.gov/UITax. Assistance is available by sending an email to firstname.lastname@example.org or by calling +1 402 471 9898.
2022 SUI tax rates
The 2022 Nebraska combined SUI tax rates continue to range from 0.0% to 5.4%, with rates within the table remaining the same or decreasing by as much as 0.03%. New non-construction employers continue to pay at 1.25% and new construction employers at 5.4%.
For calendar year 2022, Nebraska's average combined SUI tax rate is 0.49%, a reduction of 0.01% compared to the average 2021 combined rate of 0.50%.
See the Department's Guide to Understanding Nebraska's Unemployment Insurance Combined Tax Rates for 2022 for more information.
2022 SUI taxable wage base
The 2022 SUI taxable wage base will remain at $9,000 for most employers. Maximum-rated employers (5.4% for 2022) will pay taxes on the higher SUI taxable wage base of $24,000 for 2022.
Legislation (LB 428) enacted in 2019 increased the SUI taxable wage base to $24,000 for employers assigned the maximum SUI tax rate. This change was effective beginning with calendar year 2020, while the taxable wage base remains $9,000 for all other employers.(EY Tax Alert 2019-1178, 6-27-2019.)
Nebraska is one of three states with more than one SUI taxable wage base. Rhode Island imposes a higher SUI taxable wage base to employers assigned the maximum SUI tax rate. Michigan may assign a higher taxable wage base to delinquent employers, depending on the status of the state's UI trust fund.
2022 SUI tax-rate notices
The Nebraska Department of Labor mailed the 2022 paper tax-rate notices to employers on December 10, 2021. Alternatively, the 2022 employer tax rates are available online on the Department's NEworks system.
Employers may appeal their SUI rate assignment within 30 days of the rate notice mailing date.
2022 SUI tax surcharge
A portion of the SUI tax rate for 2022 will continue to go to the special state unemployment insurance tax (SUIT) fund. For 2022, the SUIT rate remains at 5% of the combined SUI tax rate. An employer will only receive credit for 95% of the contributions it pays for 2022 to its reserve account. The remaining 5% will be diverted to the SUIT account. For example, an employer assigned the 2022 SUI tax rate of 1.05% will only receive credit for 1.0% to its reserve account. When completing your federal Form 940 for 2022, only 95% of the combined SUI tax rate should be reported as SUI contributions.
Experience-rated employers may make a voluntary contribution by January 10 of the rate year to reduce their assigned combined SUI tax rate. A Voluntary Payment Notice is sent to eligible employers in the mailing of their SUI rate notice or is available online through the Department's NEworks system.
Employers with delinquent or missing UI reports
Any employer that has not submitted all quarterly SUI tax reports when the SUI tax rates are calculated in November is assigned the maximum SUI tax rate of 5.4%. An employer assigned the maximum rate for this reason may submit any delinquent or missing report by mail or via the online NEworks system on or before the December 31 falling prior to the rate year to receive a revised SUI tax rate.
Certain employers may file and pay SUI contributions annually
The Department allows positive-balanced nondelinquent employers, upon approved application, to file SUI contribution returns and pay the associated taxes on an annual basis, rather than quarterly. Employers must still file wage detail reports on a quarterly basis.
Employers desiring to file and pay SUI contributions annually must apply by February 15 of the year for which the election is made. This change was effective for calendar year 2020. (220 Neb. Admin. Code §001(B).)
Ernst & Young LLP insights
According the Department's 2022 rate guide, a significant factor allowing the 2022 average SUI tax rate to decrease is that the Department transferred a portion of CARES Act funds to the state's UI trust fund to pay for a portion of fiscal year 2021's UI benefits. As a result, Nebraska has not requested a federal unemployment insurance loan.
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