State of Michigan Mails Unemployment Tax Rate Letters

The State of Michigan recently mailed Tax Rate Determination Letters for calendar year 2012 to all Michigan employers. New this year is an "Obligation Assessment" which is added to the employer's computed experience rate to arrive at the total Michigan Unemployment Tax Rate.

This Obligation Assessment will be applied to pay bond obligations that were issued to pay off the amounts borrowed from the federal government to pay unemployment benefits in excess of collections over the last ten years. By paying off the debt, beginning in 2012 the FUTA credit reduction of .9%, which increased FUTA taxes for Michigan employers, has been eliminated.

Several other changes have affected the calculation of the Michigan Unemployment Tax Rate, including an increase in the wage base from $9,000 to $9,500 and a reduction in the experience rate calculation period from 60 months to 48 months. These changes were outlined in a letter from the State of Michigan that was mailed with the Tax Rate Determination Letter.

Contact your local Yeo & Yeo tax professional if you have questions.