UI Claims Management

Decrease of Vermont SUI Tax Rates and Taxable Wage Base

08.16.2018

Author

Jeff Aleixo

Decrease of Vermont SUI Taxes

The Vermont Department of Labor announced the second decrease in Vermont SUI tax rates starting July 1, 2018.

State unemployment taxes remitted to the Vermont Department of Labor on a quarterly basis are deposited into the Unemployment Insurance Trust Fund and used for the payment of unemployment insurance benefits to eligible claimants.

The health of the Unemployment Insurance Trust Fund resulted in the Department moving from Tax Rate Schedule IV to Tax Rate Schedule III. Consequently, the highest SUI tax rate in Vermont will be reduced from 7.7 percent to 6.5 percent and the lowest will decrease from 1.1 percent to 0.8 percent.

Another result of the change in the tax rate schedule is that the maximum weekly unemployment benefit will be indexed upwards to 57% of the average weekly wage, also effective July 1, 2018. Therefore, the previous maximum weekly benefit amount of $466 will increase to $498.

If this positive economic trend continues, employers in Vermont will also see a $2,000 reduction in the taxable wage base on January 1, 2019, meaning that it will decrease to $15,600 for 2019 from $17,600 for 2018.

Find all the necessary information on both federal and state unemployment insurance together with UI best practices.

Vermont UI Tax Liability

For-profit employers are generally liable for SUI tax rates in Vermont if they meet any of the following conditions:

  • Employing one or more persons during some part of a day in each of at least 20 different weeks in either the current or the preceding calendar year in general employment,
  • Paying at least $1,500 in gross wages during any calendar quarter in either the current or the preceding calendar year, regardless of the number of employees,
  • Taking over the business of another employer already covered under the Vermont Unemployment Compensation law, or
  • Being liable under the Federal Unemployment Tax Act (FUTA) and furnishing any employment in Vermont to individuals hired for a specific job in Vermont regardless of the number hired or the number of weeks employed.

The first three listed items effectively are the same rules as under FUTA. Therefore, if a business is liable for federal UI taxes under FUTA, it is likely to also be liable for Vermont SUI tax rates, and vice versa. Different state and federal rules, not covered here, apply to agricultural or farm workers, domestic or in-home workers, and employees of some but not all non-profit organizations.

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