Published Nov. 18, 2015
South Carolina businesses have received a 5.4% reduction on federal unemployment taxes for 2015 by the U.S. Labor Department, it was announced today.
The standard rate is 6% for the first $7,000 of wages. With the reduction, state businesses will now pay a maximum tax of $42 per employee per year, the S.C. Department of Unemployment and Workforce said. The tax is to be paid to the Internal Revenue Service using form 940 by Feb. 1.
The reduction is a result of DEW paying off almost $1 billion in federal loans last June. The state used the money to pay unemployment insurance benefits during the economic downtown, the agency said. Early and voluntary payments made over the last four years led to returning the state’s Trust Fund to solvency, which saved businesses more than $123 million in interest payments.
“By taking the hard road and paying off nearly $1 billion in federal loans six months early is allowing us, once again, to save businesses money that they can then reinvest into their companies through expansions and putting South Carolinians to work,” said Cheryl Stanton, DEW executive director.
The reduction comes not long after DEW opted to drop the state unemployment tax for the second consecutive year, which has saved statewide businesses $151 million over that period.