Nebraska LB 297
This measure provides that in tax year 2025 only, the category twelve employment security tax rate will be 0.48. Employers will remain in the category assigned to them for 2025 but will receive a tax rate based on the 2024 tax rate table. Nebraska also increased the “State Unemployment Insurance Tax” from 5% to 20%.
Effective Date
Immediately upon enactment.
Nebraska Legislative Bill 297 Implication to Stakeholders
Employers’ tax rates may be reduced if they have a positive balance. However, with the State Unemployment Insurance Tax (SUIT) increasing from 5% to 20%, employers will pay more for that tax. SUIT can be triggered on or off annually and can range between 0% and 20% of combined tax due as determined by the Nebraska Commissioner of Labor (Neb. Rev. Stat 48-649.01(3) ) and is not added into an employer’s account. Instead, it is deposited into a special fund to be used as a reserve to pay benefits only and will be used if needed by the unemployment trust fund. So, while an employer’s annual unemployment tax rate may decrease for 2025, the SUIT increase will likely erase any benefit they would have seen plus have an added impact because the tax is not deposited into employers’ accounts. The higher an employer’s account balance, the better prepared it is to pay for unemployment benefits awarded to former employees.
Recommended Action
Employers should anticipate a tax rate revision and audit it for accuracy upon receipt. If discrepancies are found, the rate should be questioned.
