Additional $15M savings from frozen taxable wage base
FRANKFORT, Ky. (Oct. 10, 2016) — A positive unemployment insurance (UI) trust fund balance will give Kentucky employers a reduction in their UI tax rate for the first time since 2008, saving them over $50 million annually, said Education and Workforce Development Cabinet Secretary Hal Heiner.
Kentucky employers will save an additional $15 million annually because the UI trust fund balance was $220.7 million on Sept. 30, freezing the taxable wage base at $10,200 for the next four years.
During the Great Recession, Kentucky’s UI trust fund balance ran a deficit forcing the state to borrow nearly $1 billion from the federal government to pay UI benefits. The deficit triggered the UI tax rate to increase to the highest level.
As a result of the positive balance on Sept. 30, the tax schedule in Kentucky will drop from Schedule E to Schedule D beginning in 2017, resulting in a savings for the state’s 93,000 employers. Schedule D tax rates range from 0.6 – 9.75 percent, compared to a Schedule E tax rates which range from 1 – 10 percent. The rate had been at the highest tax schedule since 2008.
Legislation initiated by the Unemployment Insurance Task Force passed the General Assembly in April 2010, realigning benefit levels and assessments on business to help restore solvency to the fund.
“The remarkable rebound that we have seen in our unemployment insurance trust fund is directly attributable to the substantial growth and investment by Kentucky businesses and the actions of forward-thinking leaders to return the fund to solid footing,” said Heiner. “Shared sacrifice on the part of everyone involved is paying off now and sets us on a great path for the future.”
Individuals and employers can find full details about UI at Kentucky’s Electronic Workplace for Employment Services — www.KEWES.ky.gov.
