Tag Archives: tax rate notice

Tennessee Releases 2017-2018 Tax Rate Notice

TENNESSEE EMPLOYERS: The state has recently mailed out the unemployment tax rate notice for the taxable year 2017-2018. This year the state is using premium rate table six to assign tax rates to employers.

Are you sure that the numbers on the tax rate notice is correct? Should your tax rate be revised? Are the figures used in the tax rate calculation accurate?

Contact us today to see how Dunn Corporate Resources helps ensure that employers recieve the LOWEST POSSIBLE tax rate. We are happy to offer a no-cost analysis of you unemployment tax account to see what savings may be available!

New Jersey Tax Rate Notice

New Jersey Releases Unemployment and Disability Tax Rate Notice

On July 28th New Jersey mailed out the tax rate notice for the taxable year 2017-2018. This notice contains the tax rates for both unemployment and disability. The minimum unemployment tax rate is 0.5% and the maximum tax rate is 5.8%. The state is using the same tax tables as the 2016-2017 taxable year. Be sure to check for voluntary contributions as often times employers can benefit from “buying down” their tax rates.

Dunn Corporate Resources is here to help you! If you need help interpreting your tax rate notice, we are offering a no-cost analysis of your unemployment and disability tax accounts to see what savings may be available!

What is the Taxable Wage Base?

What is the taxable wage base?

The taxable wage base is one of the key components in determining how much an employer will have to pay in unemployment taxes over the course of a year. Taxable wages vary from state to state, but generally there is a “cap” known as the taxable wage base, where an employer does not have to pay taxes on the money paid to an employee over a certain point. States determine the taxable wage base in different ways. Some use a formula or follow a certain percentage of each state’s average wages, while many follow the FUTA taxable wage base of $7,000 in 2017.

Below is a list of the taxable wage base in each state. You may notice that some states have much higher taxable wage bases than other states. These higher taxable wages are not always offset by a lower unemployment tax rate. Keep an eye out for states that adjust the taxable wage base each year. Those states are as follows: Alaska, Colorado, Hawaii, Idaho, Iowa, Minnesota, Montana, Nevada, New Jersey (lower for 2017), New Mexico, New York, North Carolina, North Dakota (lower for 2017), Oklahoma, Oregon, Pennsylvania, Rhode Island, Utah, Vermont, Virgin Islands, Washington, and Wyoming.

State	Taxable wage base
Alabama	8,000.00
Alaska	39,800.00
Arizona	7,000.00
Arkansas	12,000.00
California	7,000.00
Colorado	12,500.00
Connecticut	15,000.00
Delaware	18,500.00
Florida	7,000.00
Georgia	9,500.00
Hawaii	44,000.00
Idaho	37,800.00
Illinois	12,960.00
Indiana	9,500.00
Iowa	29,300.00
Kansas	14,000.00
Kentucky	10,200.00
Louisiana	7,700.00
Maine	12,000.00
Maryland	8,500.00
Massachusetts	15,000.00
Michigan	9,000.00
Minnesota	32,000.00
Mississippi	14,000.00
Missouri	13,000.00
Montana	31,400.00
Nebraska	9,000.00
Nevada	29,500.00
New Hampshire	14,000.00
New Jersey	33,500.00
New Mexico	24,300.00
New York	10,900.00
North Carolina	23,100.00
North Dakota	35,100.00
Ohio	9,000.00
Oklahoma	17,700.00
Oregon	38,400.00
Pennsylvania	9,750.00
Rhode Island	23,900.00
South Carolina	14,000.00
South Dakota	15,000.00
Tennessee	8,000.00
Texas	9,000.00
Utah	33,100.00
Vermont	17,300.00
Virginia	8,000.00
Washington	45,000.00
West Virginia	12,000.00
Wisconsin	14,000.00
Wyoming	25,400.00
District of Columbia	9,000.00
Puerto Rico	7,000.00
Virgin Islands	23,500.00

For more information about how taxable wages impact your unemployment expenses contact us today! One of our experts will be happy to help.

Voluntary Contributions: What are they and how do they work?

What is a voluntary contribution?

Simply stated, a voluntary contribution is a way of “buying down” your tax rate in order to produce a savings over the course of a year. By making a voluntary contribution payment, an employer will reduce their tax rate by a single bracket or sometimes two depending on the tax rating system in a certain State. Once this voluntary payment is made, the sum of the following tax payments at the new rate plus the amount of the voluntary contribution should be less than the sum of tax payments at the original tax rate – resulting in a net savings over the course of a year.

Voluntary contributions can only be made by contributory employers. A contributory employer pays quarterly unemployment insurance tax at an assigned rate based on experience. A reimbursable employer repays the state agency dollar for dollar for all benefits paid to former employees. There are pros and cons to each, however reimbursable employers do not have the benefit of making voluntary contributions.

Each state may have different deadlines to make a voluntary contributions, so make sure you stay within the time limits of your state. Many states allow for a deadline of 30 days after the mailing date of the unemployment tax rate notice.

How do you know if it’s beneficial to make a voluntary contribution?

Deciding whether to make a voluntary contribution can be confusing. Here are some easy steps:

The first step is to understand how your state’s tax system works and how your tax rate is calculated. New Jersey simply divides the reserve account balance by average taxable wages to produce the reserve ratio. The reserve ratio is then translated into a tax bracket based on the current year’s tax table. The state of New York calculates the rate the same way, however adds an additional rate called a subsidiary rate, which is derived from a separate tax table. It’s important to keep track of each moving part of your tax rate as a voluntary contribution can affect more than one part of the rate, as seen in the case of New York.
Once you understand the method your state uses to calculate the tax rate you will need to determine how much money to add to your reserve account in order to get to your desired reserve ratio. This sum of money is called the “voluntary contribution”. Remember: reserve ratio = reserve account balance / average taxable wages.
After you determine the amount needed to achieve the desired reserve ratio, the next step is to multiply your average taxable wages by the desired tax rate. This will give you the projected amount that you will pay in UI taxes throughout the next year.
Add the value of the voluntary contribution you found in step to the total projected UI taxes found in step three.
Subtract the value found in step four from the total amount of UI taxes that will be paid at the original UI tax rate. If this is a positive number then it is beneficial to make a voluntary contribution. If this is a negative number, it will not be beneficial to make a voluntary contribution.

Can everyone make a voluntary contribution?

The answer is no. As mentioned before, you must be a contributory employer to make a voluntary contribution. Most government entities and nonprofit organizations are not contributory employers and cannot make voluntary contributions.

Only about half of the states in the U.S. allow employers to make voluntary contributions. Refer to the chart below to see if a voluntary contribution is allowed in your state:

State

Voluntary Contribution

Alabama	No
Alaska	No
Arizona	Yes
Arkansas	Yes
California	No
Colorado	Yes
Connecticut	No
Delaware	No
Florida	No
Georgia	Yes
Hawaii	No
Idaho	No
Illinois	No
Indiana	Yes
Iowa	No
Kansas	No
Kentucky	Yes
Louisiana	Yes
Maine	Yes
Maryland	No
Massachusetts	Yes
Michigan	Yes
Minnesota	Yes
Mississippi	No
Missouri	Yes
Montana	No
Nebraska	Yes
Nevada	No
New Hampshire	No
New Jersey	Yes
New Mexico	No
New York	Yes
North Carolina	Yes
North Dakota	Yes
Ohio	Yes
Oklahoma	No
Oregon	No
Pennsylvania	Yes
Rhode Island	Yes
South Carolina	No
South Dakota	Yes
Tennessee	No
Texas	Yes
Utah	No
Vermont	No
Virginia	No
Washington	Yes
West Virginia	Yes
Wisconsin	Yes
Wyoming	No
District of Columbia	No
Puerto Rico	No
Virgin Islands	No

To see whether it would be advantageous to make a voluntary contribution for your organization, contact us today! One of our experts will be more than happy to assist you.

Virginia Revised UI Tax Rate Notices

Are you a Virginia employer that recently received a revised unemployment tax rate notice? Maybe even two revised rate notices? Not sure what to make of it?

Last month the Virginia Employment Commission mailed out a set of revised rate notices. These were mailed out to notify employers that their rates had changed. However, the changes were the result of a state benefit file that was ran in error. The state has recently corrected this matter and has issued a second set of revised tax rates reflecting the original tax rating data.

Mistakes by the State are very common. Employers should be aware that the numbers used in their tax rate calculation are often times incorrect – costing thousands! The DOL has a great list to show what the error rate is in your state.

Contact Dunn Corporate Resources today to have your UI account reviewed at no cost!