If you visit the United States Department of Labor’s website or listen to national news, you are aware the national unemployment rate has been slowly dropping over the last decade and even reached a record-matching low of 3.7 in September 2018 and again in November 2018. However, in December, it increased to 3.9 and economists are predicting a downturn in the economy; some even speculate on another recession in the coming years.  So, while you may have enjoyed a decrease in your corporation’s overall unemployment tax payments, there is a distinct possibility your tax rates will be on the rise.

A downturn in the economy often means higher unemployment.  And higher unemployment means more individuals will be filing unemployment claims against your healthy tax accounts, slowly dwindling reserves and spiking rates upwards.   Since employers fund unemployment benefits programs, this is a payroll tax that can quickly affect your bottom line.  But employers have a certain amount of control over how much is paid out of their accounts.

Winning as many unemployment claims as possible should be on every employer’s radar because the more losses experienced means the more benefits are paid out of tax accounts.  Unless former employees are out of work through no fault of their own, they should be disqualified from receiving benefits. This is often not the case, however, if proper documentation is not kept on the front end.  So employers could be needlessly funding unemployment claims for individuals who should not be eligible.

Since the states use a historical review of your accounts to determine future tax rates, how well you managed your claims in the past will dictate what your rates are currently and what they may be in the coming year.  Most of the states have generated new tax rates for 2019 with only five jurisdictions remaining ss of this writing.  The historical time-period for most of the states’ rate calculations is July 1 through June 30 so realistically, we are halfway through the fiscal year of the 2020 tax rates at this point.  Therefore, managing your claims from this point forward could still positively affect your 2020 rates.

As the year progresses and you begin to think about budgets for 2020, CCC can assist you with forecasting rates. The same is true if your company is considering an acquisition or merger.  Due diligence upfront may mitigate tax risk in the future.  Contact your Tax Analyst or the Director of Tax, Wayne Rottger at wrottger@corporatecostcontrol.comwith any questions you may about forecasting.


Contact CCC to see how we can save your organization time and money.
Contact our Sales Team
(800) 207-6926

Featured Videos

View All Videos

Latest News

Close

Sales

Your Name:*

Title:

Company Name:*

Company Address:

Company City:

Company State:

Company Zip:

Number of Employees:

Your Email:*

Phone Number:*

Fax Number:

Check the boxes below if you wish to receive information on any of the following:

Unemployment Cost ControlTax Credits & Incentives (WOTC)Employment / Wage Verification

Your Message:

Employment & Income Verfication

Your Name:*

Title:

Company Name:*

Company Address:

Company City:

Company State:

Company Zip:

Number of Employees:

Your Email:*

Phone Number:*

Fax Number:

Your Message: