Major Changes to Minnesota Unemployment Insurance Tax Rates for 2022

By Published On: December 22, 2021Categories: News, Tax Tips, Services - Tax

Employers have begun receiving their 2022 state unemployment notices and the rates are increasing significantly due to the high number of claims over the last two years due to the COVID-19 pandemic. The Minnesota Unemployment Insurance (UI) Trust Fund had a deficit balance on March 31, 2021, therefore it was necessary to increase the base rates going into 2022.* We have already had some clients reach out asking about the increased rates and additional assessments, so we have included a summary of the rate changes and links to some additional resources about the UI program.

The UI taxable wage base is increasing from $35,000 to $38,000 for 2022. Formerly, the lowest base rate was 0.2% and that has been increased to 0.5% for 2022. The highest base rate will stay at 8.9%. There is also an additional assessment of 14% charged on the UI base tax (not taxable wages) that has been zero the last few years and a special assessment for federal loan interest that is decreasing from 4.0% to 1.8% for 2022. Overall, employers will be paying more UI tax in 2022.

For additional information on the 2022 UI Tax Rates, visit the Minnesota Unemployment Insurance website. In addition to an overview of 2022 rates, there is an explanation of the effect of the pandemic on UI tax rates and useful charts to help you understand your tax rate and assessment amounts. There is also a listing of historical tax rate factors dating back to 2011 and a link to the 2022 new employer rates by industry.

If you have any questions about your UI tax rates or any notices received, please reach out to Pam Brackeen in our Accounting Services department or another trusted SDK advisor.

*MN is projecting a 7.7 billion dollar surplus and there are various requests on how to use the surplus. One suggestion is to use 1 billion of the surplus to replenish the MN UI fund and prevent small businesses from having a tax increase.