Colorado Department of Labor and Employment
Unemployment Insurance Operations
P.O. Box 8789, Denver, CO 80201-8789
303-318-9100 (Denver-metro area) or 1-800-480-8299 (outside Denver-metro area)
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In accordance with the Colorado Employment Security Act (CESA) 8-76-102 (5)(a), the calendar year 2004 combined rate will include a solvency tax surcharge for all ratable employer accounts. The solvency tax surcharge is not assessed on state agencies, political subdivisions, or nonprofit organizations that are reimbursable employers.
The solvency tax surcharge is assessed and added to the standard or computed tax rate when the Unemployment Insurance (UI) Trust Fund balance, on any June 30, is equal to, or less than nine-tenths of one percent of the total wages reported by all ratable Colorado employers for the calendar year, or the four-consecutive quarters prior to the last computation date. Once implemented, the surcharge will be increased in yearly increments as established by the CESA 8-76-102 (5)(a). The annual increase will continue until the UI Trust Fund balance is greater than nine-tenths of one percent of the total wages. Please note that the provision for the solvency tax surcharge is not new, only that the tax is in effect for 2004. The solvency tax surcharge will not, in any case, exceed the rate limits set forth by the CESA 8-76-102 (5)(b).
The solvency tax surcharge is determined by the percent of excess, which is the employer’s total tax paid, minus total benefits charged, divided by the employer’s average annual taxable payroll.
The solvency tax surcharge applies to all taxpaying employers except those with a percent of excess of plus (+) 20 or more. Per the CESA 8-76-102 (4)(d), all employers, except those with a benefit-charge account balance of zero, are charged the annual surcharge tax rate of 0.22 percent (.0022). The following table provides examples of how an employers base rate, surcharge tax rate, and solvency tax surcharge rate are combined to establish an employer’s calendar-year 2004 combined rate.
By December 2003, you will receive Form UITR-7, Notice of Employer’s Tax Rate that computes your base rate, surcharge tax rate, and solvency tax rate for 2004.
Rate Type |
Base Rate |
Surcharge Tax Rate |
Solvency Tax Surcharge |
Combined Rate |
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Standard Rate |
.017 |
.0022 |
.006 |
.0252 |
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Zero Rate |
.000 |
.0022 |
.000 |
.0022 |
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Maximum Rate |
.054 |
.0022 |
.011 |
.0672 |
If you have further questions regarding the solvency tax surcharge, or your tax account, please contact UI Operations at 303-318-9100. You may also send an e-mail to unemp.tax@state.co.us.