Kentucky Governor Andy Beshear (D) signed House Bill 144 into law on March 24, freezing the state’s unemployment insurance tax rate at 2020 pre-pandemic levels for 2022. The Kentucky Chamber of Commerce estimated businesses would have paid about $70 more in taxes per employee if the tax rate had unfrozen. Kentucky’s unemployment insurance tax rate is normally tied to the solvency of the state’s unemployment trust fund. Due to increased unemployment insurance fillings during the COVID-19 pandemic, the trust fund was depleted, which would have triggered higher unemployment insurance taxes without the bill.
Employers pay state unemployment taxes to fund the unemployment insurance program. Each state sets its own tax rate range, wage base (the amount of pay an employer needs to pay taxes on for each employee), and experience rating system.
Employers also pay federal unemployment taxes under the Federal Unemployment Tax Act (FUTA).
