2017 FUTA Credit Reductions, Some 2018 UI Bases Released

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By Jazlyn Williams

Employers in two jurisdictions are to pay higher payroll costs for 2017 because of Federal Unemployment Tax Act credit reductions, unchanged from 2016, the Labor Department said Nov. 13 in a credit-reduction assessment list.

Employers are assessed a higher federal unemployment tax rate than the standard effective rate of 0.6 percent on wages paid for work performed in or otherwise attributable to credit-reduction jurisdictions because the tax credit they can apply on such wages is less than the maximum credit of 5.4 percent.

California and the U.S. Virgin Islands each are to have a general FUTA credit reduction of 2.1 percent, causing employers in these jurisdictions to be assessed an additional federal unemployment tax cost of up to $147 for each employee for 2017.

An extra credit reduction, the benefit-cost rate (BCR) add-on, could have been in effect for the U.S. Virgin Islands for 2017, but the federal Labor Department approved the jurisdiction’s application for relief from the add-on. Approval of the relief allowed employers in the U.S. Virgin Islands to avoid a BCR add-on of 1.1 percent, a cost of up to $77 for each employee.

The Labor Department also approved California’s BCR waiver application, though the state did not have a potential BCR add-on for 2017, the department said.

Changes in UI Wage Bases

Increases to unemployment-taxable wage bases for 2018 were acknowledged by 11 states: Colorado, Iowa, Montana, Nevada, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Vermont, and Washington.

These states are to decrease unemployment-taxable wage bases for 2018: Arkansas, Delaware, New Mexico, Oklahoma, and Wyoming.

Washington’s 2018 wage base, $47,300, is to be the highest unemployment wage base ever applied.

In the accompanying wage base comparison chart, changes for 2018 are in bold. Wage bases that decreased are in bold italic.

State 2017 2018
Alabama $8,000 $8,000
Alaska 39,800 *
Arizona 7,000 7,000
Arkansas 12,000 10,000
California 7,000 7,000
Colorado 12,500 12,600
Connecticut 15,000 15,000
Delaware 18,500 16,500
Dist. of Columbia 9,000 9,000
Florida 7,000 7,000
Georgia 9,500 9,500
Hawaii 44,000 *
Idaho 37,800 *
Illinois 12,960 12,960
Indiana 9,500 9,500
Iowa 29,300 29,900
Kansas 14,000 14,000
Kentucky 10,200 10,200
Louisiana 7,700 7,700
Maine 12,000 12,000
Maryland 8,500 8,500
Massachusetts 15,000 15,000
Michigan 9,000; 9,5001 *
Minnesota 32,000 32,000
Mississippi 14,000 14,000
Missouri 13,000 *
Montana 31,400 32,000
Nebraska 9,000 9,000
Nevada 29,500 30,500
New Hampshire 14,000 14,000
New Jersey 33,500 33,700
New Mexico 24,300 24,200
New York 10,900 11,100
North Carolina 23,100 23,500
North Dakota 35,100 *
Ohio 9,000 9,500
Oklahoma 17,700 17,600
Oregon 38,400 *
Pennsylvania 9,750 10,000
Puerto Rico 7,000 *
Rhode Island 22,400; 23,9002 *
South Carolina 14,000 14,000
South Dakota 15,000 15,000
Tennessee 8,0003 *
Texas 9,000 9,000
Utah 33,100 *
Vermont 17,300 17,600
Virginia 8,000 8,000
Washington 45,000 47,300
West Virginia 12,000 12,000
Wisconsin 14,000 14,000
Wyoming 25,400 24,700

* Wage bases to be announced.

1 For each year when Michigan’s unemployment trust fund balance was sufficiently high during the previous year, Michigan employers not delinquent in paying unemployment-related amounts are assigned a reduced taxable wage base.

2 Experienced Rhode Island employers that are assessed the maximum unemployment tax rate are assigned a higher wage base.

3 Tennessee’s wage base may change July 1 if the state’s unemployment trust fund balance Dec. 31 and then June 30 each are at a level that would require a wage base change.

To contact the reporter on this story: Jazlyn Williams at jwilliams@bna.com. To contact the editor on this story: Michael Baer at mbaer@bna.com.

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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