The Michigan Unemployment Agency has announced a reduction in the taxable wage base beginning with the third quarter of 2015.The taxable wage base on which businesses (that are not delinquent) pay unemployment tax has been reduced from $9,500 to $9,000.
This reduction is a result of legislation enacted to properly fund the Unemployment Trust Fund during the recession. In 2011, amendments to the Michigan Employment Security Act included a wage base increase from $9,000 to $9,500. This legislation also included a condition that if the Trust Fund balance maintained a $2.5 billion balance for two consecutive quarters, the wage base would be reduced back to $9,000. That condition has been met.
The taxable wage base reduction is effective with the third quarter tax filings and will save unemployment tax dollars for employers across Michigan that are not delinquent. While this third quarter reduction does not change the tax obligation for the first and second quarters, it will result in less tax paid by Michigan employers in the upcoming quarters.
For more information, please contact one of the professionals at Yeo & Yeo.