Unemployment Insurance tax rate for 2021 set at pre-pandemic level

0



AUSTIN – The Texas Workforce Commission (TWC) has used legislative power to set Unemployment Insurance (UI) tax rates for 2021 at a stable level, consistent with 2020 rates, to avoid straining on Texas businesses a significant increase in taxes resulting from closures related to the pandemic beyond their control.

“Texas employers continue to overcome the challenges of the past year and help strengthen the economy,” said TWC President Bryan Daniel. “Today’s action on unemployment insurance taxes allows businesses to better focus their resources on innovation and expanding the jobs available to workers in Texas.”

Employer-paid unemployment insurance taxes replenish the Texas Unemployment Compensation Trust Fund, which provides temporary income to workers who lose their jobs without them being responsible. Each employer’s unemployment insurance tax rate is unique, linked to unemployment benefits paid to former employees. In the absence of the Commission’s action today, most Texas employers would have seen their tax obligations increase significantly for 2021.

“Workers in Texas are eager to get back to work and help move our economy forward,” TWC Labor Commissioner Julian Alvarez said. “This move to keep taxes low will encourage hiring and expand opportunities for working Texans.”

The Commission set the state unemployment insurance replenishment tax rate at 0.18% and the deficit tax rate at 0.0%. The bond valuation was set at 0.03% to cover any federal interest due on Title XII loans due September 30, 2021. The combination of the revival fee and the bond valuation equals at the 2020 reconstitution tax rate of 0.21%.

“This decision brings stability and predictability to our UI tax structure,” said TWC Employer Commissioner Aaron Demerson. “Texas employers and business leaders are eagerly awaiting this stability, especially after a year of widespread uncertainty. This gives them the capacity they need to hire, grow, and get the Texas economy back on track.

The 2021 tax rates are not yet updated on the Workforce Board system, but will be programmed into the system by June 30.



Leave A Reply

Your email address will not be published.