Nebraska announces $11.4 million in new tax relief!

February 5, 2020 | Dean Welter | NEBRASKA NEWS,

LINCOLN, Neb. (KTIV) -- Nebraska Gov. Pete Ricketts and the Nebraska Department of Labor announced $11.4 million in new unemployment tax relief Wednesday.

Nebraska officials say this new tax relief is thanks to a reduction in the unemployment insurance tax rate.

“Our team’s excellent work to serve Nebraskans has allowed the State to deliver tax relief while maintaining one of the strongest unemployment insurance tax systems in the country,” said Gov. Ricketts. “In addition, Nebraska’s innovative reemployment program is helping Nebraskans get back to work more quickly as well as to find higher-paying jobs.”

According to a press release from the governor's office, the tax relief means employers will pay an estimated $11.4 million less in taxes in 2020 than they paid in 2019.

The release says the continued decline in unemployment claims and benefits accounts for the decrease in the unemployment insurance tax rate.

“Employers who have paid more in taxes than their teammates have received in benefits will see tax relief,” said Nebraska Department of Labor Commissioner of Labor John H. Albin.  “The Tax Foundation’s State Business Tax Climate Index ranked Nebraska’s unemployment insurance taxes 11th in the nation when considering the recent year’s effective rate schedules, and the statutory rate schedules that may go into effect subject to economic conditions and the state of the UI Fund.  Nebraska is also among the states recognized for having the lowest minimum and maximum tax rates.”

Unemployment insurance benefits are paid from the Trust Fund to workers separated from covered employment who meet eligibility requirements.

Nebraska’s average unemployment insurance tax rate is based on the revenue target for the Trust Fund, which is used to pay benefits; the state’s total taxable wages; and the amount of unemployment benefits paid in the previous fiscal year.