Tennessee 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 to $8,000 on Jan. 1. 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 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, 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.