Unemployment tax rate lowered for 2022

Oregon

A calculator and tax books (Nexstar, file)

PORTLAND, Ore. (KOIN) — Oregon is lowering the unemployment tax rate to an average of 1.97% for 2022, which will be a decrease of 2021’s rate of 2.26%.

The Oregon Employment Department said the state puts the money collected from state payroll taxes into a trsut fund used to provide UI benefits to unemployed Oregonians. The fund is expected to remain stable through a recession, according to officials.

OED said experience ratings are determined by the number of past employees who received UI benefits. An employer’s rating increases when they lay off a large number of employees, thus their unemployment taxes increase the following year.

The fund has a “self-balancing” tax structure based on movement between eight tax schedules and assigned employers a tax rate individually based on their “experience ratings” within the yearly tax schedule.

House Bill 3389 allows Oregon to lower tax rates while other states raise them. It was signed into law in July 2021 expanding ongoing efforts to help employers by the pandemice. According to officials over the next 10 years it will save employers $2.2 billion.

The bill provides employers three types of UI tax relief. It changes how the statewide UI is calculated, as the “look-back period” was extended from 10 to 20 years, and omits both 2020 and 2021 from the look-back period.

HB 3389 also lowered the tax schedule for 2022 from schedule four to schedule three.

The bill keeps the same experience rating from the individual employer’s 2020 UI tax rate to determine the 2022 to 2024 rate. OED said “This protects employers from the impacts of the pandemic, when many had to either let their employees go or reduce their hours to meet statewide safety precautions.”

Elgible employers can defer up to one-third of their 2021 UI tax liability until June 30, 2022, without collecting interest or penalties. Some employers may be elgible to receive full or partial forgiveness.

Individual 2022 tax rates will be mailed to employers on November 15. If an employer does not receive their notice by November 22, they should contact the Employment Department Tax Section at OED_Taxinfo_User@oregon.gov or call 503-947-1488.

Additional information is on OED’s employer taxes webpage

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