Idaho Governor Brad Little (R) signed House Bill 450 into law on Feb. 18, lowering Idaho’s unemployment insurance tax rate for the next two years. The state estimated the lower unemployment tax range would save Idaho employers $64 million for the duration of the tax cut.
Employers pay state unemployment taxes to fund the unemployment insurance program. 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.
Employers also pay federal unemployment taxes under the Federal Unemployment Tax Act (FUTA).
Unemployment insurance refers to 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.
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