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| FAQ - Unemployment Insurance Fund Balance Reduction and Emergency Power Surcharges |
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| Q. |
Why do I have to pay more in taxes? <Return to Top> |
| A. |
The reason you are paying more in taxes is because there are no Fund Balance Reductions being given for 2009. Fund Balance Reductions (discount rates) are given to employers when the Unemployment Trust Fund balance is at or above $225 million dollars (per RSA 282-A:82). The current recession and rising rate of unemployment have caused concern about the health and solvency of the Trust Fund. This has resulted in a decision by the Department not to maintain a Fund Balance Reduction during 2009. For all of 2008, the Department was pleased to be able to offer employers a 1.0% Fund Balance Reduction. However, the high amount of unemployment benefits being paid out in recent months has resulted in the Trust Fund falling below the threshold amount for any fund balance reductions. To ensure the solvency of the Unemployment Trust Fund, RSA 282-A: 84 - Emergency Power is being invoked, which adds 0.5% onto every emplyers' tax rate for the remaining three quarters in 2009. |
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| Q. |
Are all employers affected by this change in the Fund Balance Reductions? <Return to Top> |
| A. |
Only the positive rated employers (those who have paid more tax than what they have been charged in benefits) and new employers are eligible to receive the Fund Balance Reductions. Employers that are negative rated (those who have more benefit charges on their account than what they have paid in tax) are not eligible for a Fund Balance Reduction. |
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What are the different levels of Fund Balance Reductions? <Return to Top> |
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There are 3 different levels of Fund Balance Reductions. A Fund Balance Reduction of 0.5% is in effect whenever the Unemployment Trust Fund equals or exceeds $225 million dollars on September 30th of the previous year. A 1.0% reduction is in effect when the fund equals or exceeds $250 million dollars on September 30th of the previous year. A 1.5% reduction is in effect when the fund equals or exceeds $275 million dollars on September 30th of the previous year. |
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Where can I find the quarterly Fund Balance Reductions? <Return to Top> |
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Employers should visit our website for the most recent information about Fund Balance Reductions and how they work. |
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Will the Fund Balance Reduction stay the same for the rest of the calendar year? <Return to Top> |
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The Fund Balance Reduction will be 0% for all quarters in 2009. |
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| Q. |
How is my earned experience rate calculated? <Return to Top> |
| A. |
Every year, NHES calculates experience or merit rates. An employer can expect to receive an earned experience rate after paying at the new employer rate of 2.7% for the first two years. The formula calculates an account reserve by subtracting all the benefits charged from all the taxes paid. This account reserve is divided by the average taxable wages paid by the employer over the last three years to come up with a reserve ratio. The reserve ratio is then applied to a tax schedule to determine the appropriate tax rate. |
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What is the highest and the lowest unemployment tax rates an employer can receive? <Return to Top> |
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The lowest unemployment tax rate in New Hampshire is 0.1% and the highest rate is 6.5%. |
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Why is there a 0.5% Surcharge being added onto all employers' tax rates? <Return to Top> |
| A. |
To ensure the solvency of the Unemployment Trust Fund, RSA 282-A: 84 - Emergency Power is being invoked, which adds 0.5% onto every emplyers' tax rate for the June, September, and December 2009 quarters. |
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| NH Employment Security is a proud member of America's Workforce Network and NH WORKS |
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The official web site of
New Hampshire Employment Security (NHES)
32 South Main Street :: Concord, NH 03301
603-224-3311 or 800-852-3400
email: webmaster@nhes.state.nh.us
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