Tuesday, September 20, 2011

Kentucky Unemployment Tax

On June 15th, Kentucky Gov. Steve Beshear signed House Bill 5, which in 2012, will increases the taxable wage base for unemployment from $8,000 to $9,000, and then by $300 each year to 2022 (not to exceed $12,000). This is in response to the state's unemployment trust fund being exhausted in 2009 forcing the government to borrow money from the federal government.

Unemployment is an employer paid tax which is paid on the employees wages up to the maximum taxable wage base. In a nutshell, this simply means that Kentucky employers will have to fork out additional tax starting in 2012. Of course higher taxes mean that companies have less money to hire employees. Kind of ironic that employers having to pay more for unemployment may help contribute to further unemployment.

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