The Michigan Unemployment Insurance Agency today announced state employers will pay less unemployment taxes beginning in the third quarter of this year due to a reduction in the state’s Taxable Wage Base.
“This is great news for job providers, families, and our entire economy,” says Gov. Rick Snyder. “When businesses can save money on their taxes it can mean retaining jobs, expanded opportunities, and even the hiring of more employees.”
Legislation was enacted in 2011 to ensured adequate funding for the state’s unemployment trust fund and specifies if the trust fund balance reaches $2.5 billion and is expected to remain at that level for two consecutive quarters, the Taxable Wage Base will automatically decrease.
The Taxable Wage Base is the annual amount of wages paid by an employer to an employee that are subject to state unemployment insurance taxes. Beginning with the third quarter tax filings in October, the Taxable Wage Base will decrease to $9,000 from its current rate at $9,500, which translates to about $16 million less in taxes assessed during 2015.
Assuming the Taxable Wage Base remains at $9,000 through 2016, there will be about $57 million less in taxes assessed during 2016.
“It’s very encouraging that the Taxable Wage Base is being lowered due to a healthy trust fund,” says Stephanie Comai, director of the state’s Talent Investment Agency. “This not only keeps unemployment insurance taxes manageable for employers, but helps to strengthen Michigan’s economy as well.”