Washington Benefit Charge Offset Program for Tax-Paying Employers

By August 28, 2020COVID-19, SUI Tax

The state of Washington passed a law in March 2020 that allocates $25 million to the state’s COVID-19 Unemployment Account.  The Washington Employment Security Department is allowing tax-paying employers to apply for an offset of COVID-19-related benefit charges from the first two quarters of 2020 which may aid in reducing the tax rate for 2021. The actual impact to tax rates is still unknown.

The ESD will create a Forgiveness Ratio once all the applications are received by the September 30, 2020 deadline.  All Approved Benefits will be divided by the $25 million in the COVID-19 Unemployment Account to determine the Forgiveness Ratio.  The more benefit charges that are approved as part of the program will result in a smaller offset amount for each employer.

To be eligible an employer must be an active, merit-rated employer in Washington and:

  • Were required to close or curtail business operations due to the state or federal Executive Order adopted to prevent the spread of COVID-19 and;
  • Have submitted all quarterly tax returns and paid all contributions, penalties and interest through the second quarter 2020 by September 30, 2020.

Thomas & Company will be filing the application for offset relief on your behalf.  Any claims that were filed during the pandemic that are classified as a COVID-19-related will be included in the request.  The state may require additional documentation after they determine your eligibility, such as re-employment documentation or payroll documents from the first and second quarters, 2020.  If we do not have the documentation needed to provide to the state, we may need to reach out for the additional information.

The Department will begin to review the applications in October, and you will be notified by mail if you are approved or denied. The amount of the offset will be shown on the 2021 rate notices.  If the application is denied, the state law does not provide the option for an appeal.

Please visit the WA ESD’s website for any updates about this program: https://www.esd.wa.gov/employer-taxes/offset.

 

Our office will monitor COVID-19 updates closely and will send out additional announcements as we become aware of any updates. You can also review these updates on our website at https://www.thomas-and-company.com/covid-19/ too.

Please reach out to your representative with any questions.

 

Josh Kendall

Author Josh Kendall

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