November 1, 2023
Delaware law extends SUI tax rate relief to 2024, increases time to appeal SUI benefit determinations
HB 236, signed into law by Delaware Governor John Carney, extends 2023's state unemployment insurance (SUI) tax relief to 2024. In addition, HB 176 gives employers and claimants more time to appeal SUI benefit determinations.
HB 236 details
SUI tax rates
In 2022, Delaware Department of Labor (DOL) Secretary Karryl Hubbard issued Emergency Rule 21 to implement a special one-year schedule of rates to reduce the SUI tax burden on employers. The Emergency Rule was codified in 2022 under HB 49, with the result that the 2023 SUI tax rates ranged from 0.1% to 5.4%, down from 0.3% to 8.2% in 2022. (Delaware DOL website.)
HB 236 extends the special one-year schedule of rates into 2024 so that SUI tax rates will continue to range from 0.1% to 5.4%.
This tax relief is possible by replenishing Delaware's SUI trust fund with federal pandemic benefits for an additional year. The DOL estimates that this tax relief will save employers an estimated $50 million when compared to the SUI tax rates that would have otherwise applied.
New employer rates
For 2024, new employers, both construction and non-construction, will continue to be assigned an SUI rate of 1%.
Effective in 2024, the current 0.2% special assessment, paid by all Delaware employers, will be redirected from the SUI trust fund to a Special Administrative Fund to pay for the DOL's future technology needs. Therefore, starting in 2024, the 0.2% special assessment is not included in certified SUI contributions reported on the federal Form 940.
The special assessment is in addition to the current "special training tax assessment," which is tied to the taxable wage base. The assessment rate will be 0.085% when the taxable wage base is $18,500, 0.095% when the taxable wage base is $16,500, 0.11% when the taxable wage base is $14,500, 0.126% when the taxable wage base is $12,500 and 0.15% when the taxable wage base is $10,500. (Delaware Employer Unemployment Insurance Handbook, p. 15.)
The special training tax assessment is also not included in certified SUI contributions reported on the federal Form 940.
HB 176 details
Increased time to appeal UI benefit determinations
Effective October 1, 2023, HB 176 increases the time employers and claimants have available to appeal a SUI benefit determination from 10 to 15 calendar days.
DOL flexibility in sending notices to employers
Effective October 1, 2023, HB 176 gives the DOL the flexibility of sending employers notices and other documents by email or other delivery methods to increase efficiency and lower mailing expenses.
Ernst & Young insights
In the bill summary for HB 176, the Delaware legislature explains that increasing the time to appeal SUI benefit determinations will help claimants and employers and also reduce the administrative burden on the DOL caused by responding to late appeals and late-filed documents.
Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor