Tax Rates 2019

It is difficult to imagine but soon employers will receive unemployment tax rates for the upcoming year.  Each year, the unemployment agencies calculate tax rates based on employers’ prior experience.  Experience is made up of multiple factors; taxable payroll, taxes paid, payments out for claims lost and reserve balance, to name a few.  While most states mail tax rates starting in November of any given year, a handful of states do so on a different time frame.

Fiscal Year States 

The states of New Hampshire, New Jersey, Tennessee and Vermont mail tax rates in the middle of a calendar year and are effective from July 1 through June 30.  We refer to these as being Fiscal Year states, meaning their tax rates are in effect during what is typically called a fiscal year as opposed to a calendar year, which is the period all other states use.  Of these four states, only New Jersey offers employers the option to buy down rates for the upcoming year so it is imperative all tax notices received be sent to your Tax Analyst for review and verification.  There are very strict deadlines for protesting or in the case of New Jersey, making the voluntary contribution so once past, the opportunity is missed.  Your CCC Tax Analyst is skilled in the verification of tax rates on your behalf and will make certain you are made aware of all possible tax reductions.  

 Tax rate Estimates 

Many employers will be ramping up for 2019 budget meetings over the next several months.  While there will be many line items in their budget, unemployment tax should also be in the mix.  Unemployment tax is one payroll tax that can be controlled through proper administration of claims as well as holding a tight rein on staffing.  Having early insight into what next year’s tax rates will be can assist employers in making the necessary changes to their policies governing employee performance which could have an impact on future tax rates.   

Making the adjustments pre-emptively can ensure later success in rate reductions.  Your CCC Tax Analyst can review your accounts and calculate what your 2019 tax rates will be so that you can accurately budget for unemployment taxes.  What better time than the present to have this conversation with your Tax Analyst so if additional data is needed, it can be acquired and the calculations completed before the budget time crunch.   

 California Pays its Title XII Loan 

As previously reported on our “This Just In” column, in May, California paid off its Title XII Loan for the first time in many years.  If the state retains its zero balance until November 10, 2018, the state’s employers should see a return to the minimum Federal Unemployment Insurance Act or FUTA rate of 0.60%.  At this time, estimates indicate California will be successful in this endeavor so employers should see their FUTA taxes return to the minimum allowed for the calendar year.  Currently, no other states have a Title XII loan.  

If you have questions, please contact our Tax Director, Wayne Rottger at 800-207-6926  extension 418 or by email at wrottger@corporatecostcontrol.com.         



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