COLUMBIA, S.C. (WCBD) – Governor Henry McMaster announced on Thursday that unemployment insurance tax rates will either decrease or remain the same for more than 86% of the state’s employers in 2021.
Gov. McMaster and S.C. Department of Employment and Workforce Executive Director Dan Ellzey made the announcement during a press conference from the Statehouse.
They said despite the pandemic, unemployment insurance tax rates for 86.3% of South Carolina employers will remain unchanged or decrease for 2021 and there will be no flat rate tax increases on employers.
Ellzey credited several efforts including the SC General Assembly’s work to approve up to $920 million in CARES Act funding to freeze 2021 tax rates at their 2020 levels and replenish the Unemployment Insurance Trust Fund balance.
He said the agency also maintained diligent rebuild efforts for the UI Trust Fund after the Great Recession to ensure the state could withstand another economic crisis.
“South Carolina is fortunate to have understood the importance of fiscal responsibility while we enjoyed the greatest economy in our state’s history,” said Gov. Henry McMaster. “Nobody could have predicted the pandemic’s impact on our nation and state, but because of our collaboration with DEW leadership and members of the General Assembly, we were able to have confidence that our state’s unemployment system was financially prepared. Because of that preparation, South Carolina’s economy is going to continue recovering faster than any other state in the country.”
According to the SC Dept. of Employment Workforce, an employers’ tax bracket is usually based on their usage of the Unemployment Insurance (UI) program, meaning the more layoffs they have, the more taxes they typically pay.
However, in March, DEW proactively announced that employers would not be penalized financially for any COVID-19 related job losses. Without the CARES Act funding, there would likely have been a rebuild of approximately $885 million between 2022 and 2025.
“Because of the foresight and planning of resources, the expected future rebuild – based off current best projections – will likely be between $6.1 and $73.6 million spread over four years,” SCDEW said.
While tax rates for each tax class are frozen at their 2020 levels, individual businesses may still move between classes based on their unemployment claim activity that was prior to the pandemic and/or not COVID-19 related, according to the agency.
“We anticipate saving South Carolina employers an estimated $172.4 million in UI taxes in 2021, significantly reducing the impact of the pandemic on employers. This keeps money in the pocket of businesses as they look for additional ways to rebuild, re-open and continue to re-hire,” said Ellzey.
All businesses with charges against their accounts are provided a “charge statement” quarterly to review and have 30 days to protest any charges they do not believe should be on their account.
Tax rate notices will be mailed to businesses Friday, November 13, but are currently available in an employer’s State Unemployment Insurance Tax System (SUITS) account. A guide showing how to access this rate can be found here.
Click here to view the 2021 tax rate chart.