|
|
|
Tax Cut
To Make New Year Brighter
|
Business New Haven
12/14/1998
By: BNH
|
Unemployment comp tax may save $200 per employee
Connecticut employers should see a significant reduction in unemployment compensation taxes in 1999. The savings should amount to roughly $150 to $200 per covered employee, and could put as much as $300 million back into the state's economy.
An improved economy and tighter unemployment compensation eligibility standards have led to a surplus in the state's Unemployment Compensation Trust Fund of more than $800 million. With more people employed in the state, employers are paying more taxes into the trust fund. Higher employment has also meant fewer layoffs and less subsequent drain on the fund.
The tax, currently 1.5 percent, is added to the employer's experience-based tax rate. For example, an employer at a minimum experience-based tax rate of 0.5 percent would have a total tax rate of two percent after including the so-called solvency rate. Given the surplus in the funds, the solvency tax will either be eliminated or drastically reduced.
The range of $150 to $200 per-employee savings is based on the state Department of Labor's projection that the solvency tax will be cut to anywhere from zero to 05 percent. Final figures will not be known and the tax reduction will not become certain until December 31. Employers should see the rate cut reflected in their first-quarter 1999 tax bills.
The state's largest business group, the Connecticut Business & Industry Association (CBIA), worked with the labor department over a period of months to make the tax cut a reality.
“This is great news for all Connecticut employers, particularly small businesses that have been hit hard by unemployment comp taxes for several years,” said CBIA President Kenneth O. Decko. “More dollars will be put back into the economy for new investments in job training, employee wages and benefits, and plants and machinery.”
|
Go FirstGo PreviousGo
NextGo LastGo
to Index
|
|
