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Maryland announces fifth consecutive year of low unemployment insurance taxes

By November 21, 2019May 26th, 2020No Comments

The below applies to all Maryland employers except 501(c)(3) organizations. 501(c)(3)s do not have to pay state unemployment insurance taxes – high or low. Many nonprofits could save as much as 30 percent or more on their unemployment costs by opting out of the unemployment insurance tax system – an advantage provided to them by the IRS. Doing so affords nonprofits unique avenues that allow them to strategically handle unemployment claims administration and unemployment insurance taxes in ways that for-profits can only dream about.

Contact us today for more information concerning your nonprofit unemployment insurance tax advantages.

Governor Larry Hogan announced that for the fifth straight year, Maryland employers will receive the lowest possible unemployment insurance (UI) tax rates allowed under state law. The low tax rate has been made possible by Maryland’s low unemployment and high job growth.

Over the past five years, Maryland’s Unemployment Insurance Trust Fund has steadily increased. Since September 30, 2015, the fund has grown by more than $309 million to nearly $1.3 billion. Despite it’s growth Maryland’s fund, according to the U.S. Department of Labor, is still not solvent and could not handle even a modest recession without being forced to borrow money from the federal government.

Unemployment insurance claim filings, both total and initial filings, are the lowest they have been in over a decade. Benefits paid dropped nearly $62 million between fiscal year 2018 and fiscal year 2019. These factors have resulted in lower unemployment benefit payments, which have helped keep the rate at Table A.

“Our administration is committed to creating more jobs and greater opportunities for our state’s businesses and workforce,” said Governor Hogan. “With a state unemployment rate of 3.7% and the lowest number of unemployment filings in over a decade, we are proud to say that more Marylanders are employed and more businesses are open than ever before.”

In 2020, the range of rates will be from 0.3% to 7.5%. The rate for new employers will be 2.6%. The rate for new construction employers headquartered in another state, which is calculated differently under Maryland law, will be 4.5%. The taxable wage base for 2020 will remain at $8,500.

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