Many North Carolina employers may be eligible to reduce their 2006 unemployment insurance tax rates - and save from $50 to $1 million next year - by making a voluntary tax contribution to the N.C. Employment Security Commission before December 15.

A contribution of as little as one dollar may reduce an employer's 2006 tax rate. Voluntary contributions will be applied to the balance of employers' UI tax account. Notification of the voluntary contribution was included in the tax rate forms, which were mailed to employers on November 15. A calculator is available on the Employment Security Commission website which allows employers to assess the dollar amount they will have to pay to achieve a certain tax rate.

Only experienced-rated employers are eligible to make the voluntary contribution. New employers' rates are set, by law, at 1.2 percent for approximately of two years.

...back to 1 December 2005

Further information:
N.C. Employers May Reduce 2006 UI Tax Rates

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David L. Clegg, Deputy Chairman of the North Carolina Employment Security Commission (ESC), has appeared before the U.S. House Ways & Means Human Resources Subcommittee to describe the agency's efforts to recoup millions of dollars lost due to fraud. He was one of five witnesses who testified that state implementation of the SUTA Dumping Prevention Act of 2004 is generally going well, but additional tax abuses need to be addressed, and states should use their existing legal authority to go after past abusers.

State unemployment insurance tax avoidance, or "SUTA dumping" is a scheme whereby businesses seek to avoid paying increased taxes, which ordinarily follow any layoff. The bigger the layoff, the potentially larger the increase will be for the business the following tax year, which begins each January.

While the ESC has always pursued SUTA dumping, increased efforts over the past two years have netted the agency over $12 million in recovered taxes and penalties. Clegg described how much North Carolina has accomplished, much of it by using laws that already existed before the new state and federal laws were passed. He encouraged other states to use their existing legal authority and not simply write off past abuses, as past abusers are likely to be current abusers.

...back to 16 June 2005

Further information:
ESC's Clegg Testifies Before Congress About Solving Unemployment Tax Avoidance

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