We have now received UI tax rate notices for calendar year 2011 from twenty-one states. As anticipated, tax rates are trending higher.
In thirteen of the states, a higher tax rate table and/or higher adjustment factors take effect for 2011. The most significant increases (so far) are in Colorado, Florida, and Washington. Many of these changes are directly caused by the depletion of the state UI trust funds, which triggers higher tax rates by statute. Only one of these states (North Dakota) will have a more favorable rate table next year. Of course, each company’s own experience is the most important factor in the tax rate calculation.
In nine of these states, the unemployment taxable wage base will increase.
We expect UI tax rates to trend higher for at least two more years. Following is a brief summary by state:
Alabama: The same tax rate schedule (Schedule D) that was in effect for 2010 is in effect for 2011. However, the Shared Cost Assessment, which is charged to every employer, has increased from 1.50% in 2010 to 1.60% in 2011. As a result, tax rates will range from 2.25% to 8.40% (including the ESA, if applicable). The Alabama unemployment taxable wage base remains unchanged at $8,000 for 2011.
Alaska: A slightly less favorable tax rate table is in effect for 2011, with tax rates ranging from 1.00% to 5.40% (not including the 0.58% Employee Withholding Unemployment Tax Rate). Additionally, the Employee Withholding Unemployment Tax Rate has increased from 0.50% for 2010 to 0.58% for 2011. The Alaska unemployment taxable wage base has increased from $34,100 in 2010 to $34,600 for 2011.
Arkansas: For 2011, tax rates continue to range from 1.00% to 6.90% (including the 0.80% Stabilization Tax and the 0.10% Extended Benefit Tax). In addition, employers that are assigned a contribution rate of 6.00%, and have had that rate for the two preceding years, will be assigned an additional assessment of 2.00% (for a total rate of 8.90%). Furthermore, after two consecutive years of receiving the additional assessment of 2.00%, the assessment will be increased to 4.00% (for a maximum tax rate of 10.90%). The Arkansas unemployment taxable wage base remains unchanged at $12,000 for 2011.
Colorado: A significantly higher tax rate table is in effect for 2011, with tax rates ranging from 1.00% to 11.02% (including applicable surcharges). The Colorado unemployment taxable wage base will remain unchanged at $10,000 for 2011.
Florida: Your tax rate is the sum of three factors: the Variable Adjustment Factor, the Final Adjustment Factor, and the Benefit Ratio. While the Final Adjustment Factor and the Multiplier used for the Variable Adjustment Factor are both the same for all employers, the Benefit Ratio is determined on an individual basis according to the experience of the employer. In general, Florida tax rates are significantly less favorable for 2011. The Multiplier has increased from 0.4171 to 0.5833 and the Final Adjustment Factor has increased from 0.36% to 1.03%. As a result, tax rates for 2011 will range from 1.03% to 5.40%. The Florida unemployment taxable wage base remains at $7,000 for 2011.
Idaho: The same tax rate schedule that was in effect for 2010 is in effect for 2011. As a result, tax rates will range from 0.96% to 6.80%. The Idaho unemployment taxable wage base will remain $33,300 for 2011.
Illinois: In general, unemployment tax rates are less favorable for 2011 because 1) the State Experience Factor has increased from 107% to 123%, and 2) the Fund Building Rate has increased from 0.45% to 0.50%. Tax rates for 2011 will range from 0.70% to 8.40%. Also, the Illinois unemployment taxable wage base will increase from $12,520 in 2010 to $12,740 for 2011.
Iowa: Although tax rates for 2011 will continue to range from 0.00% to 9.00%, the tax rate table is actually slightly less favorable for most employers because of a change in the benefit ratios and their corresponding tax rates. For example, in 2010 a benefit ratio of 0.2422% earned a rate of 0.50%; whereas for 2011 the same ratio earns a rate of 0.60%. The Iowa unemployment taxable wage base will increase from $24,500 for 2010 to $24,700 for 2011.
Kansas: As a result of legislative changes enacted in March 2010, the tax rate table remains frozen for 2011, with rates ranging from 0.11% to 5.40% (not including the applicable surcharge for employers with a negative account balance). The tax rate for new employers has also remained unchanged at 4.0%. Further, the Kansas unemployment taxable wage base remains at $8,000 for 2011.
Kentucky: The same tax rate table is in effect for 2011, with tax rates ranging from 1.00% to 10.00%. The Kentucky unemployment taxable wage base remains unchanged at $8,000 for 2010.
Minnesota: For 2011, there have been no changes to The Base Tax Rate (0.50%), the Additional Assessment (14.00% of UI tax due), or the Workforce Development Fee (0.12% of taxable wages). However, the Federal Loan Interest Assessment has increased from 0.00% for 2010 to 2.00% for 2011. The Minnesota unemployment taxable wage limit remains unchanged at $27,000 for 2011.
Missouri: The same tax rate table will remain in effect for 2011, with tax rates ranging from 0.00% to 7.75% (plus any applicable surcharges). Additionally, the Missouri unemployment taxable wage base will remain unchanged at $13,000 for 2011.
North Carolina: The same tax rate table (Schedule A) remains in effect for 2011, with tax rates ranging from 0.00% to 6.84% (including the applicable State Reserve contribution rate). Additionally, the North Carolina unemployment taxable wage base will remain $19,700 for 2011.
North Dakota: North Dakota unemployment tax rates range from 0.20% to 10.00% for 2011. For most tax rate brackets, the rates are generally lower than last year’s tax rates. For example, an employer with a reserve ratio of 2.00% was assigned the tax rate of 0.51% for 2010; whereas the corresponding tax rate for 2011 is 0.20%. However, please note that the North Dakota unemployment taxable wage limit has increased from $24,700 in 2010 to $25,500 for 2011.
Ohio: A higher tax rate schedule will go into effect for 2011, with tax rates ranging from 0.70% to 9.60%. While thirty of the rate brackets will remain unchanged, ten of the rate brackets have increased slightly. Further, all tax rates will be less favorable because the Mutualized Contribution Rate has increased from 0.20% for 2010 to 0.40% for 2011. The state unemployment taxable wage base will remain at $9,000 for 2011.
Oklahoma: In general, tax rates are less favorable for 2011 because the State Factor (Item 5) has increased from 42% to 46%, and the State Conditional Factor (Item 6) has increased from “None” to “D.” Tax rates for 2011 will range from 0.30% to 9.00%. The Oklahoma unemployment taxable wage base will increase from $14,900 in 2010 to $18,600 for 2011.
Oregon: A less favorable tax rate schedule (Schedule 8) is in effect for 2011, with tax rates ranging from 2.20% to 5.40%. The Oregon unemployment taxable wage base will increase from $32,100 in 2010 to $32,300 for 2011.
Utah: In Utah, the Reserve Factor (Item F) and the Social Costs (Item H), along with the employer’s individual experience, are used to arrive at the Overall Computed Rate. Both the Reserve Factor and Social Costs increased for 2011 (1.00% to 1.45% and 0.20% to 0.40%, respectively). Including all factors, tax rates for 2011 range from 0.40% to 9.40%. The Utah unemployment taxable wage base has increased from $28,300 in 2010 to $28,600 in 2011.
Virginia: In general, tax rates are less favorable in Virginia for 2011. A Fund Building Charge of 0.20% still exists in this year’s tax rate calculation and the Pool Cost Charge has increased from 0.28% for 2010 to 0.47% for 2011. Additionally, the Fund Balance Factor remains at 50% for 2011. Tax rates for 2011 will range from 0.77% to 6.87%. The Virginia unemployment taxable wage base remains unchanged at $8,000 for 2011.
Washington: In general, tax rates have become significantly less favorable for 2011 for two primary reasons: First, the Social Cost Tax Rate has increased with a range of 1.33% through 2.04%. Second, a less favorable tax rate schedule has been implemented, with rates for non-delinquent employers ranging from 1.36% to 6.03% (including the applicable Employment Administrative Fund fee). In addition, the Washington unemployment taxable wage base has increased from $36,800 in 2010 to $37,300 for 2011.
Wisconsin: The same tax rate table remains in effect for 2011, with tax rates ranging from 0.27% to 9.80% (including the applicable solvency rate). The Wisconsin unemployment taxable wage base will increase from $12,000 in 2010 to $13,000 for 2011.