2018 Unemployment Insurance Tax Relief Law

Gov. C.L. “Butch” Otter’s 2018 UI Tax Relief Law reduces the unemployment insurance taxes paid by businesses by $115 million over three years while still maintaining the solvency of the unemployment insurance reserve fund used to pay benefits. Many employers will see the average tax contribution reduced from $370 per employee to $252.

How the tax rates changed

Positive Class Rates
OLD Tax Rate NEW Tax Rate
0.393% 0.269%
0.654% 0.448%
0.785% 0.537%
0.916% 0.627%
1.047% 0.716%
1.178% 0.806%
1.309% 0.895%
Standard Rate
OLD Tax Rate NEW Tax Rate
1.374% 1.000%
Deficit Class Rates
OLD Tax Rate NEW Tax Rate
2.355% 1.611%
2.617% 1.791%
2.879% 1.969%
3.141% 2.149%
3.664% 2.507%
5.400% 5.400%
Read the full tax array chart (pdf)*
* May differ in specific instances due to a company acquisition or merger.

Freqently Asked Questions

When does this law take effect?

Immediately. When Governor Otter first proposed this bill during the 2017 legislative session, he wanted employers to reap the benefits of the tax cut as soon as possible. That’s why the 2018 version includes language declaring an emergency, which legally allows the bill to become retroactive to Jan. 1, 2018. Passing and signing the bill prior to Feb 28, 2018 allows Idaho businesses sufficient time to re-program their accounting and payroll systems before the second quarter.

What do I need to do to get the new tax rate?

A corrected tax rate notice will be mailed to the official address of record you have on file with the Idaho Department of Labor. Please work with your accountant or bookkeeper to make sure your tax software – such as QuickBooks - has been changed to reflect your new rate as is shown in the chart above.

What if I pre-paid my unemployment insurance taxes for the first quarter of 2018?

Employers who paid their first quarter taxes in advance before the law took effect must take any overage and apply it as a credit to a future quarter.

Can Idaho's Unemployment Insurance Trust Fund withstand a $115 million tax reduction and how will it affect the state's ability to pay unemployment insurance benefits?

Idaho's unemployment insurance trust fund is at a strong sustainable level and well positioned to weather another economic downturn of the magnitude of the Great Recession. With a December 2017 balance of $781 million, Idaho ranks among the top 15 states in the nation for solvency - the ability to pay unemployment insurance benefits during economic contractions.

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