The state Department of Labor & Workforce
Development announced Tennessee employers will benefit from paying less in
unemployment insurance premiums in 2016.
The state’s Taxable Wage Base decreased
from $9,000.00 to $8,000.00 on Jan. 1, 2016. The Taxable Wage Base is the
annual amount of wages paid to an employee that is subject to state
unemployment tax. This means employers will only have to pay taxes on the first
$8,000 of an employee’s wages, instead of $9,000.
“This is great news for small business,” said Jim Brown, state director of NFIB/Tennessee, the state’s leading small-business association.
“This is a step forward for both the
economy and employers in the state of Tennessee,” said Linda Davis,
Unemployment Insurance Administrator. “We have rebuilt the trust fund to a
healthy level, allowing the Taxable Wage Base to decrease for employers.”
During the economic recession, Tennessee’s
Unemployment Insurance Trust Fund became insolvent due to increased
unemployment claims. In an effort to ensure adequate funding to pay
unemployment benefits to employees who lost their jobs, through no fault of
their own, legislation was passed which increased Tennessee’s Taxable Wage Base
from $7,000 to $9,000. The legislation also included provisions to reduce
the Taxable Wage Base when the Trust Fund was restored to an adequate funding
level.
On Dec. 31, 2015 the Unemployment
Insurance Trust Fund balance was over $900 million, which triggered the
lowering of the Taxable Wage Base to $8,000.00. The Taxable Wage Base applies
to employers who pay quarterly state unemployment insurance
premiums.
Also, as of Jan. 1, 2016, employers with
10 or more employees are required to file online. Employers with 10-99
employees who do not wish to file online must provide justification in the form
of a notarized statement submitted each year, along with the first quarter
report.
For more information on the Taxable Wage
Base, and to file first quarter reports, visit: https://www.tn.gov/workforce/article/wage-and-premium-reports-tnpaws.
