Tax relief is coming to Maryland employers—beginning on Jan. 1, 2014, the state’s unemployment insurance tax is being reduced by up to 70 percent, Governor Martin O’Malley announced Wednesday.
“Progress doesn’t happen by chance, but by the choices we’re making together to build a strong, growing and resilient economy,” O’Malley said in a statement. “As a result of our efforts together with Maryland employers to recover the jobs lost during the recession, Maryland businesses will see a significant cut in their unemployment insurance rate—many as much as 70 percent.”
Department of Labor, Licensing and Regulation Secretary Leonard J. Howie III, Maryland Chamber of Commerce President and CEO Kathy Snyder joined the governor in the announcement.
The state currently manages an unemployment insurance trust fund valued at $934,896,062, the eighth highest in the country. With unemployment payouts peaking in 2009, the recession strained the trust fund and additional contributions from employers were required. The improved economy, however, has allowed the government to lower contribution rates.
According to figures released by the state:
|Unemployment insurance tax rate ranges on the first $8,500 in annual wages|
|2012||2.2% – 13.5%|
|2013||1.0% – 10.5%|
|2014||0.3% – 7.5 %|
For many Maryland businesses, the rate reduction will represent an 86 percent drop in unemployment insurance costs since 2012. An employer at the lowest end of the tax rates, who paid $85 per employee in 2013, will pay less than half as much, $25.50, in 2014, the state announced.
“By working together when times are tight, we’re now seeing significantly reduced unemployment insurance taxes for Maryland’s employers, adding further fuel to our economic recovery,” Howie said. “Thanks to the leadership of Governor O’Malley and the work of our partners in the General Assembly, and the hard work and fortitude of Maryland businesses, we are far ahead of most states in this area.”
The secretary added that unlike 15 other states, Maryland does not depend on federal loans to pay unemployment insurance benefits.