COLUMBIA, SC (WSPA) — State leaders announced Thursday South Carolina’s unemployment insurance tax rates for employers will decrease or remain unchanged next year.
They said this is possible because of the use of the CARES Act money to help replenish the state’s Unemployment Insurance Trust fund.
According to state officials, in 2020, upon the recommendation of Governor McMaster and Executive Director Ellzey, the General Assembly invested about $835 million in the UI Trust Fund.
They said this decision saved South Carolina businesses millions in taxes and has allowed South
Carolina to avoid federal loan repayment and interest.
“While other states had to take out millions of dollars in loans to cover the cost of unemployment, South
Carolina took a fiscally responsible approach that is now paying dividends in lower taxes for our
businesses and zero debt to repay,” said Governor Henry McMaster. “Today’s announcement will save
South Carolina’s businesses millions of dollars, allowing them to reinvest into our state and create even
more jobs for our people.”
According to the South Carolina Department of Employment and Workforce, a balance of approximately $1.19 billion, South Carolina will:
- Set tax year 2022 rates to raise approximately the same level of revenue as 2020 and 2021.
- Rates will either be lower than the prior two years or remain the same.
- No tax rate class will experience an increased tax rate for 2022.
- Not require any solvency surcharge due to the sufficiently high trust fund balance.
- Maintain a balance that ensures the state could withstand another economic contraction.
“We are excited to announce stable tax rates for the second year in a row coming out of one of the most challenging economic times in recent history,” said S.C. Department of Employment and Workforce Executive Director Dan Ellzey. “Currently, eleven states have outstanding loan balances and five are still actively borrowing federal funds. California is currently accruing approximately $37 million in interest per month on the debt they owe to the federal government. Without the wise investment of CARES Act funds, South Carolina may have had to rebuild around $836 million between 2022 and 2025.”
Officials said tax rate notices will be mailed to business owners next week.