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Maryland Unemployment Insurance Tax Rate Changes Explained [2022]

By: David Lanchak

If your Maryland business is subject to unemployment insurance taxes, be aware of potential changes to your tax rate for the 2022 calendar year.

What Is My Tax Rate?

You should have received a notification from the Maryland Department of Labor’s Unemployment Insurance (UI) Division in late January 2022 with your tax rate for the current year.

The selected rate comes from Tax Table C, which includes lower tax rates than the table used in the 2021 calendar year, Tax Table F. This change comes from state legislation designed to provide relief from higher rates to ease the economic burden of the pandemic on Maryland employers.

How Is My Rate Calculated?

Tax tables in Maryland range from Table A (lowest rates) to Table F (highest rates). On each of these tables, an employer’s benefit ratio corresponds with a specific UI tax rate. The Maryland Division of Unemployment Insurance calculates an employer’s benefit ratio by dividing the employer’s benefit charges by their taxable wages (from three fiscal years before the computation date).

The computation date is always July 1 before the calendar year for which the rate is assigned. For example, the computation date for the 2020 calendar year is July 1, 2019, and fiscal years 2017, 2018 and 2019 determine the employer’s 2020 tax rate.

What’s Changing for 2022?

To provide financial relief for employers due to the pandemic, each employer received two tax rate calculations for 2022:

  1. One based on pre-pandemic experience that excludes fiscal years 2020 and 2021 (based on fiscal years 2017, 2018 and 2019)
  2. One based on normal experience that includes fiscal years 2020 and 2021 (based on fiscal years 2019, 2020 and 2021)

Your rate for 2022 will be the lower of the two rates.

Questions?

To learn more about these changes, visit the Maryland Department of Labor’s website. If you have any questions, feel free to contact us here or call 800.899.4623.

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