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SOLVENCY SURCHARGE
In accordance with the Colorado Employment Security Act
(CESA)
8-76-102 (5)(a), a solvency surcharge was assigned to all ratable
employer accounts beginning in calendar year 2004. Ratable employers contribute
taxes according to an established rate rather than reimburse the Unemployment
Insurance (UI) Program dollar for dollar based upon the benefits charged against
the account. Most employer accounts are ratable.
The purpose of the solvency surcharge is to maintain a sufficient monetary level in the UI
Trust Fund, which ensures the UI Program’s ability to pay UI benefits as
established in CESA. A short-term increase in the tax rate because of the
addition of the solvency surcharge will result in an actual decrease in employers’ base tax
rates as the balance of the UI Trust Fund increases.
In 2009 the base rate was at the lowest base rate attainable. Because of an
decrease in the monetary level of the UI Trust Fund, the 2010 chart for an
employer’s base rate will change. For calendar year 2010 the base tax
rate will moveto the column heading 306-342 Million. See
CESA 8-76-103 (3)(b)(II)(B).
Form UITR-7, Notice of Employer’s Tax Rate, mailed to employers in November
2009, provides the combined tax rate for calendar year 2010. The yearly solvency surcharge increment is included in the combined tax rate for calendar year 2010 for
ratable employer accounts.
The following Web pages provide additional information about the solvency surcharge:
If you have any questions or comments about the solvency surcharge, Contact Us. |