Iowa’s unemployment rate returned to pre-pandemic levels over the past several months, leading to an announcement from Iowa Workforce Development (IWD) that employers will pay much lower unemployment taxes beginning next year. Gov. Kim Reynolds says, “[This] announcement is great news for our employers who are already dealing with significantly increased costs due to historic inflation. Iowa faced the pandemic and its economic impacts head on, and due to our conservative fiscal practices and prudent investment in Iowa’s Unemployment Trust Fund, unemployment insurance taxes in our state will soon reach their lowest rates since 1999.” IWD establishes a table annually to determine eligible employers’ unemployment tax rates. Based on this formula, the average employer will pay $72.20 less per employee beginning in the 2023 calendar year. The rate shift stems from the governor’s decision to use $237 million in American Rescue Plan Act (ARPA) funds and $490 million in Coronavirus Aid, Relief, and Economic Security (CARES) Act funds to stabilize the state’s unemployment trust fund. Businesses are expected to see a 25-percent decrease in unemployment taxes when the change takes effect.
