2024 Annual Tax Rate and Benefit Charge Information - Unemployment Insurance

NOTE: Unemployment insurance tax rates were recalculated for 2024, due to a reinterpretation of Labor & Employment Article § 8-606(d). As in 2022 and 2023, the Maryland Division of Unemployment Insurance compared two methods of computing the tax rate and assigned the lower of the rates to each earned and standard rate employer. Regarding the calculation, one method is based on the employer’s pre-pandemic experience, and one is based on immediate past years’ experience.

All employers will receive a new 2024 Rate Notice in BEACON by Monday, April 1, and each employer will receive notice of this correspondence through their preferred communication method (text, email, or mail). For detailed information, see the Recalculation of Calendar Year 2024 Tax Rates FAQs and PowerPoint presentation.

1. What tax table is in use for 2024?
Employers will be taxed under the Table A tax rate schedule for the 2024 calendar year.

Table A includes rates that range from 0.30% to 7.50%. View Table A tax rate schedule. For 2024:

• The rate for new employers is 2.60%.
• The rate for a foreign contractor (new construction employers headquartered in another state) is 3.30%.
• The standard (employer) rate is 7.50%.
• The taxable wage base is $8,500.

2. How are employer tax rates determined?
For unemployment insurance (UI) tax purposes, employers are considered contributory or reimbursable.

• Contributory employers pay quarterly UI taxes based on benefit charges and taxable wages.
   
• Reimbursable employers (government entities and certain non-profit organizations) may choose to reimburse the state for benefits charged against their account, instead of paying quarterly UI taxes.

Contributory employers are assigned one of three different types of tax rates listed below.

• New Account (also called New Employer) Rate - This rate is assigned to a new employer (an employer who is not yet eligible for an experience rate. See below). The new employer tax rate is determined by averaging the rates among all employers in the state (during the last five years).
  
  Note: New employers in the construction industry that are headquartered in another state are not assigned a typical new account rate. Instead, they are assigned the average rate for the construction industry in Maryland.
   
• Experience (also called Earned) Rate - This rate is assigned after an employer has paid wages to employees in at least two fiscal years (July 1 to June 30) before the computation date.
  
  The computation date is the July 1 before the calendar year (for which the rate is assigned). For example, the computation date for 2020 was July 1, 2019.
  The experience tax rate is calculated based on an employer’s benefit charges and taxable wages.
   
• Standard Rate - This rate is assigned to an employer who is eligible for an earned rate, but has no taxable wages in a year because the employer failed to file quarterly tax and wage reports. The standard rate is the highest rate on the tax table in effect in a given year.

3. How are experience tax rates calculated?
For employers who are eligible for an experience rate, the tax rate is determined by the employer’s benefit ratio and the tax table in effect for the year.

The Maryland Division of Unemployment Insurance (DUI) determines an employer’s benefit ratio by dividing the employer’s benefit charges by their taxable wages (from the three fiscal years preceding the July 1 computation date).

The computation date is always the July 1 date before the calendar year for which the rate is assigned. Example: The computation date for calendar year 2020 was July 1, 2019. Fiscal years 2017, 2018, and 2019 were used to determine an employer’s 2020 experience tax rate.

Note: If an employer has only been in business for two fiscal years before the computation date, the benefit charges and taxable wages for those two years are used.

4. When do employers receive their annual tax rates?
In January, DUI sends each employer an Experience Rate Notice, which informs an employer of their UI tax rate for the new calendar year. For 2024, employers should expect to receive this notice in mid to late January.

Employers may access their annual rate notice in BEACON by:

• Selecting “Tax Rate Functions” from the portal left menu.
• Then, select “Rate Notice.” See the screenshot below for an example.

An employer will also receive the notice via their preferred communication method.

5. Can an employer protest their annual tax rate?
Yes, employers can protest their assigned tax rates. To do so, an employer can request a review determination within 30 days of the Date of Notice listed on the employer’s Experience Rate Notice. An employer can request a review either in BEACON or by mail.

To request a review in BEACON:

• Select “Tax Rate Functions” from the portal left menu.
• Select “Rate Notice.”
• Then, select “Protest” under Annual Tax Rate Calculation (at the bottom of the screen). See the screenshot below.

Send a request for review by mail to:

Division of Unemployment Insurance
Review Determination Unit
1100 N. Eutaw Street, Room 401
Baltimore, MD 21201

6. Will an employer be charged for fraudulent benefits?
No, neither contributory nor reimbursable employers will be charged for benefits that are determined to be fraudulent.

7. What should employers do if they believe a fraudulent charge is included on their benefit charge statement?
Employers should protest the benefit charge statement in BEACON
To protest the charge in BEACON:

• Select Benefit Charge Functions
• Choose the Year/Quarter hyperlink
• Select the Claimant’s Social Security Number
• Select Request Relief of Charges
• Choose the reason for the protest
• Type inside the box the reason for the protest. (There will be an option to upload a document to support the reason for the protest.)

Note: If fraudulent claims continue to be charged to your account, please e-mail ui.fraud@maryland.gov to report the fraudulent activity. The fraud unit will investigate and cancel the claim if it is determined to be fraudulent.

8. Can employers still protest a fraudulent claim on their benefit charge statement after the 30-day protest period has lapsed?
Yes, employers may protest a fraudulent claim even after the 30-day protest period has lapsed. Employers may file a protest after the 30-day protest period, however the protest must be submitted by mail:

Division of Unemployment Insurance
Review Determination Unit
1100 N. Eutaw Street, Room 401
Baltimore, MD 21201