Employers: Apply By September 30, 2020 for Unemployment Tax Relief

Sep 24, 2020   Print PDF

By Amy Kangas Alexander and Aviva Kamm | Related Practice: Employment

Employers who had to furlough employees due to COVID-19 must apply now for help lowering their 2021 unemployment tax rates. Legislation from this past spring created a $25 million account to help relieve tax burdens for employers affected by COVID-19. Employers must apply to have this account offset benefit charges to avoid those benefits charges increasing the employer’s experience rating.

Woman working on tax forms

Only benefit charges from the first two quarters of 2020 are eligible for relief. An employer can get relief for charges related to employees who have returned to work for at least four weeks and who are being paid at least 90 percent of their pre-furlough weekly pay. There are some exceptions for employees who returned to work, but quit or were discharged before completing four weeks of work.

There is no guarantee that you will get substantial relief if you apply - the $25 million account will be divided among all the applicants. The greater the number of approved applications, the smaller the offset for each employer. But it is certain that if you do not apply on or before the September 30, 2020 deadline, you will not receive any offset and will have all charges from the first two quarters of this year considered in calculating your 2021 experience rating.

Applications are due September 30, 2020, and are available here.

General information about benefits charges can be found here.

General information about experience ratings and how they are calculated can be found here.

If you have specific questions about your situation, contact a member of the Stokes Lawrence Employment practice.