New Unemployment Tax Rate in State of Michigan

Our entire country has been under financial hardship for some time now but some states have been struggling more than others. Some states are quickly running out of unemployment funds. Michigan has recently seen a huge increase in individuals filing for unemployment due to the recent failures of the auto industry. The unemployment rate in Michigan in September of 2008 hit a new high of 8.7%.

Every year Michigan borrows money from the feds to cover the unemployment funds that are disbursed. In the past Michigan has been able to repay these loans quickly and has avoided interest and penalties. Michigan is currently out of funds to repay these loans to the federal government so that means as of January 1, 2009 they will have to begin paying interest on their loans.

Solvency Tax

Currently businesses in Michigan pay out between .06%-10.3% on the first $9,000.00 that each worker earns. The percent each business pays depends on their history of employees filing for benefits. Due to the fact that Michigan will be paying out interest on their loans, they have decided to pass some of this expense on to about 20% of the businesses.

Companies will be required to pay an additional $67.50 that have not paid in how much the government has paid out to their employees in unemployment. The new tax will be called the solvency tax. Although it does not seem to be a good time to impose another new tax for Michigan businesses, it seems unavoidable with the number of unemployment claims being filed.

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