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September 29, 2023
2023-1621

Montana law lowers the maximum number of weeks that claimants can receive unemployment insurance benefits

Montana Governor Greg Gianforte signed into law H.B. 652, which lowers the maximum number of unemployment insurance (UI) benefit weeks from 28 to 24. The law is effective for UI benefit claims filed on or after July 1, 2023.

This legislation has the indirect effect of lowering employers' state unemployment insurance (SUI) costs while also reducing cash outflows from the state's UI trust fund.

Montana's prior UI benefit cap of 28 weeks was one of the highest in the nation, with most states having a maximum of 26 weeks. With the enactment of HB 652, Montana joins just seven other states (Alabama, Arkansas, Florida, Georgia, Iowa, Michigan, Missouri and South Carolina) with maximum UI benefit weeks below 26. (U.S. Department of Labor, 2022 Comparison of State Unemployment Laws.)

2023 employer SUI cost outlook

The 2023 Montana SUI wage base is $40,500, up from $38,100 in 2022. (Montana Department of Labor & Industry, Contribution rates and taxable wage base for 2023.)

Montana SUI tax rates for 2023 continue at Rate Schedule 1 with rates ranging from 0% to 6.12% and the average SUI rate at 1.12%. The rate for new employers ranges from 1% to 2.20%.

For 2023, all employers pay the Administrative Fund Tax of 0.18%, except for employers assigned a 0% rate and employers assigned a 0.13% rate in Eligible Rate Classes 1 and 2.

Ernst & Young LLP insights

This year Iowa also lowered its maximum UI benefit weeks from 26 weeks to 16 under HF 2355. According to the fiscal note attached to HF 2355, reducing the maximum allowable weeks of UI benefits from 26 weeks to 16 for most claimants was estimated to decrease the amount of UI benefits paid from Iowa's UI trust fund by $69.2 million in FY 2023 and $70.9 million in FY 2024. (See Tax Alert 2023-0285.)

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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)

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor

 

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