The New Mexico Department of Workforce Solutions announced that the 2017 state unemployment insurance (SUI) taxable wage base will increase to $24,300, up from $24,100 for 2016.
According to the Department, revised state unemployment insurance (SUI) tax rates for the third and fourth quarters 2016, the result of legislation enacted earlier this year, will be issued in November 2016. Employers affected by the change will have their accounts credited for any overpaid amount for the third quarter, the amount of which may be applied against future SUI taxes or requested as a refund.
SUI tax rates for calendar year 2017 will also be issued in November.
Legislation changed the SUI rate computation
As we previously reported, HB 283 will reduce many experience-rated employers’ SUI tax rates for third and fourth quarter 2016 and beyond by adding an “experience history factor” to the rate calculation formula.
Effective for calendar year 2017, an additional “reserve factor” will be added to the computation of SUI tax rates that will reduce many employers’ tax rates. The “reserve factor” will be multiplied by an “experience history factor,” computed as all of the employer’s previous contributions, minus all of the employer’s benefit charges, to equal the reserve balance, divided by the average of the last three fiscal years of taxable payroll, and then applied to a schedule.
The bill requires that experience-rated employers’ SUI tax rates for 2016 be recomputed using the new formula for the third and fourth quarters 2016 (effective July 1 through December 31, 2016).
Note that this is not a retroactive change to the beginning of the calendar year. New employer tax rates will not change, and the minimum SUI tax rate will remain at 0.33% and the maximum rate (before adding the excess claims premium) at 5.4%