As the fourth quarter of 2017 approaches, more states are to release unemployment tax rates for 2018.
Each state has the potential to adjust unemployment tax rates to maintain a target trust fund balance. Some states establish one range of tax rates, generally called a rate schedule or rate table, from which each employer is assessed a rate based on its relative experience with unemployment in relation to its annual payroll. Other states establish multiple schedules or versions of a primary schedule, and the schedule in effect is determined with the state trust fund balance or other factors indicative of trust fund solvency.
Several states are expected to finalize 2018 unemployment tax rates in September: Arkansas, Georgia, New Hampshire, Oklahoma, South Dakota, and Wisconsin. Each state, except New Hampshire, calculates rates using the state’s trust fund balance as of June 30 the year before the rates are to apply. New Hampshire, which has the potential to adjust rates quarterly, examines its trust fund balance levels each day of a quarter to determine its rates for the next quarter.
One schedule: Arkansas and New Hampshire each have one set of basic rates for experienced employers that generally does not change. Additional assessments, surtaxes, or rate-reductions may be applied to an employer’s basic rate depending on the balance of the trust fund and whether the employer is positive-rated or negative-rated.
Variations of one schedule: Georgia and Oklahoma each have several schedules that are based upon one primary range of basic rates. Georgia has six schedules that are modified versions of its primary schedule, where each schedule specifies a percentage by which an employer’s primary-schedule tax rate is adjusted.
Oklahoma has the potential to apply basic rates from either its unadjusted range of 0.1 percent to 5.5 percent or from one of four conditional factors, which may be in effect when the balance of the state's unemployment trust fund account is below a target level. Each conditional factor specifies assessments to be added to each rate group’s basic tax rate.
Multiple schedules: South Dakota and Wisconsin each have multiple tax rate schedules that may be in effect depending on the state’s unemployment trust fund balance. South Dakota is to choose rates from one of two schedules for the first time in 2018, under a measure (H.B. 1097) signed March 10 by Gov. Dennis Daugaard.
For a list of unemployment tax rates that have been released for 2018, subscribers of the Payroll Administration Guide may visit the chart, “Unemployment Insurance: Taxable Wage Bases and Tax Rates.”
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