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Unemployment Tax-Common Rating

Unemployment Tax-Common Rating

There is an unemployment tax savings program in Ohio that many employers don’t realize is available, and it is referred to as Common Rating.  The Ohio Common Rating Program is a tax savings program for Ohio companies that have more than one unemployment account number in Ohio and they must have common ownership for each account number.  The rule for the common ownership is that there has to be a 51% common ownership for each unemployment account number. Additional rules to qualify for the program is that each unemployment account has to be experience rated and they have to have a positive account balance. Each account shall maintain a separate entity and shall submit contribution reports separately.

 

The concept of Common Rating is to combine the experience rates of two or more companies together in order to achieve a reduced unemployment tax rate.  I have seen some employers that have achieved tax savings in the hundreds of thousands of dollars.

 

A study should be completed by a knowledgeable unemployment tax expert to ensure that this is advantageous for your businesses.   If you are planning a merger or acquisition for the upcoming year you would not want to apply for this program as the change could negatively impact your savings.  You would also want to complete an alternate study to compare the saving of Common Rating to Voluntary Contributions.  It could be possible that making the early Voluntary Contribution could provide more savings than the Common Rating Program would.

 

Applications for Common Rating must be submitted to the state by December 31st.  For more information about this savings program contact Bryan Bundy at Matrix Claims Management at 513-351-1222 ext. 175