09 January 2025 2025 state unemployment insurance taxable wage bases
SUI trust funds are largely financed by employer contributions (in Alaska, New Jersey and Pennsylvania employees also make contributions). States are required to maintain an SUI taxable wage base of no less than the limit set under the Federal Unemployment Tax Act (FUTA). The 2025 FUTA wage limit of $7,000 has remained unchanged since 1983, despite increases in the federal minimum wage and annual cost-of-living adjustments over the last 42 years. Some states are conservative in their approach to maintaining adequate SUI trust fund reserves. Consequently, the SUI wage base is flexible in those states, meaning it is indexed to the average wage and/or or varies based on the trust fund balance. For 2025, 27 jurisdictions have a flexible wage base. (EY survey of states for 2025; US Department of Labor, Comparison of State Unemployment Laws) Following is the list of the 2025 SUI taxable wage bases as of December 31, 2024 (as compared to 2024) and employee SUI withholding rates, if applicable.
Under HB 1430 (2023 Act 196), effective January 1, 2024, the SUI taxable wage is $7,000 when the UI Trust Fund is in excess of $600 million as of June 30 of the most recently completed state fiscal year and increases to the taxable wage base are limited to $2,000 each year. (Ark. Code Ann. Section 11-10-215.) Legislation in 2020 (SB 20-207) held the SUI taxable wage base at $13,600 for calendar year 2021 with incremental increases each year thereafter until it reaches $30,600 in 2026. The SUI taxable wage base is $17,000 in 2022, $20,400 in 2023, $23,800 in 2024, and $27,200 in 2025. After 2026, the taxable wage base will be adjusted by changes in the annual average weekly wage. HB 6633/Public (Act 21-200), enacted in 2021, increased the SUI taxable wage base for calendar year 2024 to $25,000, up from $15,000. Beginning with calendar year 2025, the taxable wage base is indexed each year for inflation. H.B. 433 enacted in 2024 reduces new employer SUI tax rates and phases in a permanent taxable wage base over three years- $12,500 for calendar year 2025, $14,500 for calendar year 2026, and $16,500 for calendar year 2027 and thereafter Under H.B. 2570 and starting in 2026, the current fixed SUI wage base of $14,000 will be adjusted annually as a percentage of the statewide average annual wage. The percentage will increase progressively through 2030. The taxable wage base is expected to continue to increase by $300 each calendar year until it reaches $12,000. The law provides for a reduced taxable wage base of $9,000 if the Trust Fund balance reaches or exceeds $2.5 billion for two consecutive quarters; otherwise, the wage base is $9,500. (Michigan taxable wage base.) To qualify for the lower wage base of $9,000, individual employers are required to be in “good standing”, which means they have filed all SUI quarterly tax reports and there are no missing reports or estimated reports. Also, an employer’s unpaid SUI tax contribution (including tax, penalty or interest) cannot exceed $25. In February 2025, delinquent employers will be sent Form 6354 Notice of $9500 Taxable Wage Base to remind them to file any missing report and/or pay an outstanding balance. Delinquent employers have 14 days to fix outstanding issues with their account to qualify for the reduction. (Michigan Employer Advisor, December 2024.) The taxable wage base can be increased by $1,000 or decreased by $500 for any year, depending on the average balance of the Unemployment Compensation Trust Fund of the four preceding calendar quarters. In no event shall the state taxable wage base increase beyond $13,000 or decrease to less than $7,000. (RSMO Section 288.036(2).) Legislation enacted in 2019 (LB 428) increases the SUI taxable wage base to $24,000 for employers assigned the maximum rate. The taxable wage base remains $9,000 for all other employers. Employee contribution rate includes the Workforce Development/Supplemental Workforce Funds surcharge. The taxable wage base will continue to increase as follows: $12,500 in 2024; $12,800 in 2025; $13,000 in 2026; for each year thereafter, computed as 16% of the state's average annual wage. Legislation from 2017 grants the territory's Secretary of Labor the discretion to increase the taxable wage base to as much as $10,500 if deemed necessary. Negative-balanced employers assigned the maximum tax rate will have a taxable wage base that is $1,500 higher than other employers. Under Tennessee UI law, if the UI trust fund balance on December 31 of any year is less than $900 million, the taxable wage base is $9,000. If the trust fund balance is above $900 million, but less than $1 billion on December 31, the taxable wage base is $8,000. If the trust fund balance exceeds $1 billion on December 31, the taxable wage base is $7,000. Under current law, and effective April 2009, the wage base is $12,000, provided that (1) when the moneys in the unemployment fund reach $220 million on February 15 of any year, the wage base thereafter will be reduced to $9,000, and (2) each year thereafter the wage base shall increase or decrease by the same percentage that the state's average wage increases or decreases. (SB 246 (2009); W. Va. Code Section 21A-1A-28; Code of State Rules Section 83-1-7 .1.) The wage base is lowered from $9,521 to $9,500 for 2025. (West Virginia SUI rate notice letter, November 2024.)
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