Unemployment Insurance Tax Rates Rising in 2011

Casey Kelly, KTOO – Juneau

Alaskans will see an increase in the state’s unemployment insurance tax rate in 2011.

The rate for employers — set by a formula in state law — will go up about half a percent. The employee rate will rise slightly from its current half percent minimum.

Despite the increases, Alaska’s 2011 rate for employers will be the fifth lowest in the last 31 years. That’s according to Virginia Calloway, Chief of Unemployment Insurance Taxes with the state Department of Labor. She says one reason is the state’s unemployment insurance trust fund has more than $200 million in the bank.

Meanwhile, Congress Tuesday failed to pass an extension of federal unemployment insurance, meaning thousands of Alaskans will start losing their benefits in the coming weeks and months.

The state provides 26 weeks of regular benefits, which Congress had extended to 99 weeks through four separate bills.

Tom Nelson, Director of Employment Security at the Labor Department, says more than 35,000 Alaskans received unemployment insurance during the last week of November. Of those, more than 10,000 got some form of federal benefits. New claims for one federal extension expired last week. Another expires Dec. 11. And one extension the federal government had been paying 100 percent will now be split 50-50 between the state and feds.

Alaska is one of only three states — along with Pennsylvania and New Jersey — where employees help fund the system along with employers.

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