IDAHO FALLS (Idaho Statesman) – Idaho businesses won’t have to foot the full bill for unemployment compensation paid to workers furloughed or laid off as the coronavirus gripped Idaho. The nation’s taxpayers will, eventually.
The Idaho Department of Labor said Friday that it will keep its standard unemployment-insurance tax rate on employers at the legal minimum in 2021: 1% of payroll costs. That’s despite a surge of claims for unemployment compensation that placed heavy demands on the state’s unemployment trust fund this year.
Normally, employers pay all of the cost of unemployment compensation through the tax. Employees and other taxpayers pay nothing. But when the pandemic plunged the nation into crisis in March, Congress passed a roughly $2 trillion relief law, the CARES Act, to provide coronavirus relief. One part of the law gave $150 billion to state and tribal governments, with latitude to spend as they saw fit on pandemic relief.
RELATED | The state says it overpaid your unemployment benefits. Now it demands the money back
Idaho’s share was $1.2 billion. Gov. Brad Little tapped $200 million of that to help the state’s unemployment insurance trust fund.
The state has paid about $1 billion this year in unemployment compensation attributed to COVID-19. Through Nov. 28, it had paid $930 million, including $714 million in CARES Act benefits and $216 million in regular state unemployment. Little’s $200 million wipes out most of that state share of the pandemic burden.
“Thanks to Gov. Little approving a $200 million transfer of CARES Act funding to keep the Unemployment Insurance Trust Fund whole, most Idaho businesses will see a decrease in their tax rate for 2021,” said Jani Revier, Idaho Department of Labor director, in a news release. “This move … will help business owners as they navigate through these difficult times.”
Little in September estimated that the average employer would have faced a $300 tax increase for each employee in 2021 without the injection of CARES Act money. That increase would have hindered job growth, he said.
The Idaho fund was well-funded before the pandemic. It had more than $700 million in March, plus $200 million in a reserve fund. With the fresh $200 million, the average tax on employers will fall 18% in 2021, Idaho Labor said.
The 1% tax, called the standard tax, is assessed on all new employers for 1 1/2 years. After that, the state punishes employers with higher claims from laid-off or furloughed workers with higher taxes. It rewards employers who have paid more taxes than employees take out with taxes below the standard rate.
Idaho enjoyed a record low unemployment rate of 2.5% in March, right before COVID-19 struck. The next month, the jobless rate reached a record high 11.8%. More than 103,000 Idaho workers were jobless at one point.
FEDERAL VIRUS-RELIEF PROGRAMS AND IDAHO WORKERS
Apart from the $1.2 billion allocated to Idaho, the CARES Act provided funds to laid-off or furloughed Idaho workers in three forms, and an executive order by President Donald Trump provided a fourth:
$540 million came in the $600 weekly federal pandemic supplements to state unemployment benefits that ended in July.
$88 million has come in federal pandemic payments to the self-employed that expire Dec. 26.
$44 million has come in the federal 13-week pandemic extension of expired state benefits that also expires Dec. 26.
$43 million came in a federal lost-wages assistance program that Trump created in August after the $600 supplements ended and Congress could not agree on an extension. Trump tapped previously appropriated emergency funds to pay $300 per week, but the program had only enough money for five weeks.
The CARES Act’s final bill is uncertain, but its estimated $2 trillion cost has been contributing to a national debt that now totals $27.5 trillion. The debt has risen more than one-third since President Trump took office and has nearly quintupled since 2000 as federal tax collections have fallen increasingly short of spending.
Congress has talked for months about adding new benefits and has been negotiating for the past few days on a new package, but no agreement had been reached by late Friday.
The post Idaho employers catch break on taxes to support workers who lost jobs from pandemic appeared first on East Idaho News.
Source: eastidahonews.com
Be First to Comment