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Iowa unemployment insurance rates to drop to 24-year low in 2023


The schedule of unemployment insurance rates used to tax Iowa employers will drop to its lowest level in 24 years in 2023, Gov. Kim Reyolds and Iowa Workforce Development announced today. Beginning Jan. 1, contribution rates will be drawn from Table 8, the lowest rates currently allowed under Iowa law. “Today’s announcement is great news for our employers who are already dealing with significantly increased costs due to historic inflation,” Reynolds said in a release. “Iowa faced the pandemic and its economic impacts head on, and due to our conservative fiscal practices and prudent investment in Iowa’s Unemployment Trust Fund, unemployment insurance taxes in our state will soon reach their lowest rates since 1999.” The trigger for deciding which unemployment insurance rate table to implement is derived from a formula based primarily on the balance in Iowa’s unemployment insurance trust fund, unemployment benefit history, and covered wage growth. Reynolds decided last year to invest $237 million in ARP funds to stabilize the unemployment trust fund following record payouts due to COVID-19. In 2020, at the heart of record unemployment, Gov. Reynolds also directed that $490 million of CARES Act coronavirus relief funds be used to support the trust fund. Table 7 has been used for the past five consecutive years. The switch to Table 8 means that a business paying the median tax rate (on employee wages totaling $36,100 or more annually) and remaining in the same tax rank as 2022 would pay $72.20 less per employee in unemployment taxes in 2023.

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