Alabama’s unemployment insurance taxes plunging | Alabama | #republicans | #Alabama | #GOP


(The Center Square) – Employers in Alabama will have significant changes in unemployment insurance taxes this year.

The state’s Department of Labor announced Friday that employers will have a 54% reduction in the form of a tax cut to 2023 unemployment insurance taxes as the state has moved into the lowest tax rate schedule.

“Following the economic uncertainty and the record-breaking amount of unemployment compensation benefits paid out during the pandemic, it is absolutely remarkable that we have been able to lower taxes for employers and drop to the lowest tax rate schedule in this short amount of time,” Department of Labor Secretary Fitzgerald Washington said in a release.

According to the release, Alabama is dropping the schedule for the first time since 1997. The average tax rate for 2023 is the lowest in history since the metric began being tracked. Also, employers will not have to share costs this year after many years of shared costs collection that were directly related to the COVID-19 pandemic.

“This announcement is further proof of how well Alabama is recovering from the pandemic – not in nearly 30 years have our employers seen a UI tax schedule at the lowest level – and the rates are the lowest in history, to boot,” Republican Gov. Kay Ivey said in a statement. “Our economic decisions during this time of national economic uncertainty are paying off – by putting more money in employers’ tills and allowing them to hire more Alabamians, benefiting the state as a whole.”

Currently, there are four tax schedules utilized in Alabama, according to the release, which are named A, B, C and D. The schedule was designed to assist in culling a recovery of benefit costs so that the Unemployment Insurance Trust Fund is neither depleted nor flush with excess revenue.

According to the release, the tax structure determined for use is dependent on the balance of the trust fund.

“Lower taxes allow businesses to hire more employees and spur spending,” Washington said in the release. “This record low tax rate is further evidence of Alabama’s economic recovery and shows how resilient we have been as a state.”

According to the release, unemployment insurance taxes for the first $8,000 of wages earned by an employee are paid by the employer.


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