The Nevada Department of Employment, Training and Rehabilitation (DETR) announced that the state of Nevada will begin collecting an assessment from employers to pay the revenue bonds the state used to repay loans from the federal government to cover shortfalls in the state’s unemployment insurance fund during the recession. These additional assessments will begin in the first quarter of 2014.

These payments are in addition to regular unemployment insurance payments. However, since the state no longer owes the federal government for these loans, employers in Nevada will soon no longer be forced to pay increased federal unemployment tax rates.

The sale of bonds and the repayment plan for both the federal loans and the bonds themselves was spelled out in SB515, which passed during the 2013 Legislature and was signed by the Governor.

Employers should begin receiving details from the State of Nevada near the end of January. Business owners are encouraged to consult with their tax professionals to determine how this additional assessment will affect them.

The statement from the DETR announcing this assessment,

The State of Nevada has issued special revenue bonds, as provided for in recent legislation SB515, for the purpose of repaying federal loans needed to pay unemployment benefits.  An advantage to using bonds to pay for these loans is that Nevada will no longer be a federal unemployment (FUTA) credit reduction state for the 2013 tax year, restoring the full federal credit offset of 5.4%.  Additionally, with the loans being repaid, no future interest associated with them will be accruing.  Contributory employers subject to Nevada unemployment insurance (UI) taxes will be required to pay a quarterly bond assessment to cover the principal, interest, and administrative payments on the bonds.

This notice is to advise you that collection of bond contributions will begin with the first quarter 2014, with a due date of April 30, 2014 and will continue to be collected quarterly from employers until the bonds are fully repaid in late 2017 or early 2018.  Bond contributions are separate from, and in addition to, regular quarterly Nevada unemployment insurance taxes.  The collection of bond contributions will be administered using the same laws as those for regular UI contributions.

Bond contribution rates will be calculated according to the formula established in the regulation. Quarterly Bond Contribution = quarterly Taxable Wages paid X your assigned Bond Factor.

In late January 2014, employers or their authorized agents will be advised by mail of final details, including their assigned bond factor based on 2014 UI tax rates.  Like your UI tax rate, your bond factor will be reviewed annually, and is based on the employer’s previous experience with unemployment.  Employers with low UI rates will have lower bond factors than employers with higher UI rates.  (Tax Rate Notices for 2014 are scheduled for mailing on or before December 31, 2013.  The taxable wage base for 2014 is $27,400 per employee.)

For more information:

Nov 26, 2013: Press Release Regarding State Repaying Unemployment Insurance Debt

Nevada Revised Statutes:  Unemployment  Compensation Bond Fund (NRS 612.6102 – 612.6134)