South Dakota unemployment insurance tax cut takes effect

South Dakota House Bill 1011, which decreases the state unemployment tax rate for employers by 0.5%, took effect Jan. 1, 2024. The state estimates businesses will save about $18 million in taxes in 2024 under the new law.

Gov. Kristi Noem (R) signed the bill on Feb. 1, 2023. The state Senate passed the bill 30-3 on Jan. 25, 2023, and the state House passed the bill 70-0 on Jan. 18, 2023.

State unemployment taxes are state employment taxes employers pay to support the unemployment insurance program. State unemployment taxes are also known as SUTA taxes, state unemployment insurance (SUI) taxes, or reemployment taxes. Each state sets its own tax rate range, wage base (the amount of pay an employer needs to pay taxes on for each employee), and experience rating system.

Unemployment insurance is a joint federal and state program that provides temporary monetary benefits to eligible laid-off workers who are actively seeking new employment. Qualifying individuals receive unemployment compensation as a percentage of their lost wages in the form of weekly cash benefits while they search for new employment.

The federal government oversees the general administration of state unemployment insurance programs. The states control the specific features of their unemployment insurance programs, such as eligibility requirements and length of benefits.

For information about unemployment insurance programs across the country, click here.

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