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April 11, 2022
2022-0595

Kentucky legislation reduces 2022 SUI tax rates and taxable wage base; revised rate notices to be issued

Recently enacted legislation (HB 144) lowers the previously assigned 2022 state unemployment insurance (SUI) tax rates by reducing the rate schedule in effect from Rate Schedule C to the lowest allowed by law, Rate Schedule A. Rate Schedule A was also in effect for 2021 following 2021 legislation (2021 HB 413/Chapter 177).

The legislation also reduces the 2022 SUI taxable wage base to $10,800, down from the original $11,100 scheduled to be in effect for 2022, the same taxable wage base in effect for 2020 and 2021.

As a result of HB 144, the 2022 SUI tax rates now range from 0.3% to 9.0%, down from the original range from 0.5% to 9.5%. The new employer rate remains at 2.7%, except for construction employers which pay at 9.0% (down from the previously assigned 9.5%). (Kentucky Office of Unemployment Insurance website; employer guide.)

Unless legislation is enacted in the future, the taxable wage base is expected to continue to increase by $300 each calendar year (to $11,100 for 2023) until it reaches $12,000.

For calendar year 2022, the diversion of 0.075% to the service capacity upgrade fund (SCUF) is suspended due to the condition of the state's unemployment insurance (UI) trust-fund balance. The SCUF was also suspended in 2021. (Kentucky Department of Unemployment Insurance UI Self-Service website.)

Revised tax rate notices

According to the Kentucky Department of Unemployment Insurance UI Self-Service website, the revised 2022 SUI rate notices were to be mailed to employers during the week of March 28, 2022 and will also be available on the agency's electronic system. Employers are required to file their quarter SUI tax returns over the electronic system.

For more information on Kentucky SUI taxes, see the Division's website.

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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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