COLUMBIA, S.C. (WCBD) – Governor Henry McMaster announced Thursday South Carolina’s unemployment insurance tax rates for employers will decrease or remain unchanged for 2022.
The state’s General Assembly last year invested CARES Act funding to replenish South Carolina’s Unemployment Insurance Trust Fund, a decision which Gov. McMaster said has saved businesses millions in taxes and avoid federal loan repayment and interest.
“While other states had to take out millions of dollars in loans to cover the cost of unemployment, South Carolina took a fiscally responsible approach that is now paying dividends in lower taxes for our businesses and zero debt to repay,” said Gov. McMaster. “Today’s announcement will save South Carolina’s businesses millions of dollars, allowing them to reinvest into our state and create even more jobs for our people.”
With a balance of approximately $1.19 billion, South Carolina will:
- Set tax year 2022 rates to raise approximately the same level of revenue as 2020 and 2021.
- Rates will either be lower than the prior two years or remain the same.
- No tax rate class will experience an increased tax rate for 2022.
- Not require any solvency surcharge due to the sufficiently high trust fund balance.
- Maintain a balance that ensures the state could withstand another economic contraction.
“We are excited to announce stable tax rates for the second year in a row coming out of one of the most challenging economic times in recent history,” said S.C. Department of Employment and Workforce Executive Director Dan Ellzey. “Currently, eleven states have outstanding loan balances and five are still actively borrowing federal funds. California is currently accruing approximately $37 million in interest per month on the debt they owe to the federal government. Without the wise investment of CARES Act funds, South Carolina may have had to rebuild around $836 million between 2022 and 2025.”
Gov. McMaster’s office said South Carolina borrowed nearly $1 billion from the federal government during the Great Recession to provide unemployment benefits. SC DEW was able to pay off the loan in 2015 and save businesses roughly $12 million in interest.
State legislatures then passed new regulations requiring DEW to rebuild the trust fund within five years to a level that would cover the potential benefit needs of a typical recession cycle without borrowing from the federal government.
The agency completed that effort a year before the coronavirus pandemic, which impacted businesses across the state.