February 28, 2022
Nevada 2022 SUI wage base increased but tax rates remain unchanged
The 2022 state unemployment insurance (SUI) tax rates continue to range from 0.25% to 5.4%. The tax brackets changed slightly, but the average SUI tax rate remains 1.65% for 2022. (Annual revised regulation.)
According to Governor Steve Sisolak's news release, the Nevada Employment Security Council recommended an increase to the SUI tax rates for 2022, increasing the average rate from 1.65% for 2021 to an average rate of 2% for 2022. Instead, after discussion with the business community, the Employment Security Division (ESD) decided to hold the average rate at 1.65%, the same as was in effect for 2020 and 2021.
The 2022 new employer rate remains at 2.95%. The additional Career Enhancement Program (CEP) surcharge remains at 0.05%. Note that this additional surcharge is not counted as SUI contributions for federal Form 940 calculation purposes.
2022 SUI taxable wage base
The 2022 SUI taxable wage base increased to $36,600, up from $33,400 for 2021. The SUI taxable wage base is calculated each year at 66 2/3% of the average annual wage paid to Nevada workers in the previous calendar year. (NRS §612.545; ESD website.)
2022 SUI tax rate notices
The 2022 employer tax rate notices were mailed on December 17, 2021. Tax rate notices are also available electronically on the employer's Employer Self-Service (ESS) account. (December 2021 quarterly employer newsletter.)
For information on how the average SUI tax rate and the tax rate schedule are determined each year, see the public meeting site of the Nevada Department of Employment, Training and Rehabilitation at https://detr.nv.gov/Page/Public_Meetings.
Employers not charged with UI benefits through second-quarter 2021
The ESD announced that through the issuance of regulations and the passage of SB75 in 2021 employer accounts would not be charged with UI benefits during the pandemic. According to the ESD's website, employers have not been charged for UI benefits from second quarter of 2020 through the third quarter of 2021.
Accordingly, UI benefits for these quarters were disregarded when the ESD calculated employer the SUI tax rates for 2021 and 2022. (EY Tax Alert 2020-1997, 8-6-2020.)
Contributory employers did not receive benefit charge statements for the applicable quarters.(Employer Self-Service (ESS) account.)
Reimbursable employers were relieved from paying UI benefits, and did not receive a billing notice, for the second through fourth quarters of 2020 and the first and second quarters of 2021. Reimbursable employers did receive a billing statement for the third quarter of 2021, for benefit weeks ending from September 11, 2021 through October 2, 2021.
Ernst & Young LLP insights
Nevada repaid its federal UI loan in full in late 2021 using federal American Rescue Plan Act (ARPA) funds. Repayment before September 6, 2021 avoided the need for the ESD to assess employers for federal interest due September 30, 2021 on the federal UI loan through an additional surcharge. (EY Tax Alert 2021-1899, 10-19-2021; 2021SB 461.)
Nevada began borrowing from the federal government in December 2020 when the state's UI trust fund, which had a balance of almost $2 billion prior to the pandemic, became insolvent. Because the loan was repaid prior to November 10, 2021 and the state continued to have no loan balance as of January 1, 2022, Nevada employers are spared a Federal Unemployment Tax Act (FUTA) credit reduction for calendar year 2022, which would have increased the FUTA tax rate for Nevada employers by 0.3%.
EY Payroll News Flash