VEC ANNOUNCES UNEMPLOYMENT INSURANCE TRUST FUND HAS RETURNED TO PRE-PANDEMIC LEVEL; FUND BUILDER TAX ELIMINATED FOR 2023 – REDUCING EMPLOYER TAXES
The Virginia Employment Commission (VEC) announced today that the unemployment insurance fund trust fund has returned to pre-pandemic levels and surpassed key solvency levels. As of December 2, 2022, the Virginia unemployment insurance trust fund balance available for benefits is $1,466,766,128. As employer tax statements go out in December, because of actions taken by the General Assembly and approved by the Governor, employers will see the elimination of the $16 per employee fund builder tax in 2023.
“The economic recovery from the pandemic, coupled with actions taken by the Governor and General Assembly to make additional investments into the unemployment insurance trust fund, has resulted in the trust fund returning to pre-pandemic levels and creating stability in the fund,” said Carrie Roth, Commissioner of the VEC and Advisor to the Governor for Strategic Initiatives. “In addition, as a result of budget actions, the $16 per employee fund builder tax is eliminated for calendar year 2023.”
There are three components that make up unemployment insurance taxes: base, pool, and fund builder. Every year the trust fund solvency percentage is calculated by dividing the adequate fund balance by the actual trust fund balance. The $16 per employee fund builder tax kicks in for solvency percentages less than fifty percent. Virginia’s trust fund solvency has now reached fifty-five percent.
In previous sessions of the Virginia General Assembly, the unemployment insurance taxes were capped at their calendar year 2021 levels. While an employer can improve their tax rates, they will not exceed those paid in calendar year 2021 unless they are delinquent in remitting their taxes. Between December 2020 and June 2022, the General Assembly also authorized deposits of over $1.2 billion in federal CARES Act and ARPA funding into the trust fund.
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