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In the 2016 New Mexico Legislative Session, HB 283 “Unemployment Compensation Contribution Rates” was passed. The legislation created the “Experience History Factor,” an additional factor to the way in which Unemployment Insurance taxes are calculated. The “Experience History Factor” goes into effect mid-year for 2016, and adjustments will be reflected in your rate for Quarter 3 and Quarter 4 of 2016.

Rate notices which reflect the new “Experience History Factor” will be available in November 2016.  You will receive two notices at that time:

  1. One for the 3rd and 4th Quarter of 2016; and
  2. One for calendar year 2017.

If you are a new employer in 2016, you will not be receiving a rate notice for 3rd and 4th Quarter of 2016. You will just receive the 2017 rate notice in the November 2016 letter. Your 2016 rate will remain the same since HB 283 does not impact the calculation for new employer rates (rates based on industry averages and apply to employers in business for less than 24-months).

Please note: The legislative change adding the “Experience History Factor” into the tax rate calculation formula will apply starting in the 3rd and 4th Quarter rate for 2016. Rates for these two quarters will be recalculated in November 2016, and your account will be properly credited if there is any amount over paid for the 3rd Quarter. You can request a refund or apply it as a credit to future quarters. The changes set forth in HB 283 do not have an impact on 2016 Quarter 1 or Quarter 2 payments.

The “Experience History Factor” is based on the difference between all of your previous years’ tax payments and all the previous years’ benefit charges to your account, divided by the average of your annual taxable payrolls for the immediately preceding fiscal years, up to a maximum of three fiscal years.

The “Experience History Factor” can only affect your account in a positive way, but please also note that there are other factors and considerations that are a part of the overall tax rate calculation.

For questions, please contact the Unemployment Insurance Operations Center at 1-877-664-6984, Option 3, Monday through Friday 8:00a.m.-4:30p.m., or contact us via email at uitax.support@state.nm.us.

INFORMATION ABOUT REPORTING FEDERAL UNEMPLOYMENT TAX ACT (FUTA) TAX

Information and instructions are available on the official Internal Revenue Service (IRS) website at: www.irs.gov/uac/about-form-940

 

Unemployment Insurance Tax Information

 

Frequently Asked Questions about HB 283 and 2016/2017 Rates

The legislative change adding the "Experience History Factor" into the tax rate calculation formula will apply to the 3rd and 4th Quarter rate for 2016. Rates for these two quarters will be recalculated in November 2016, and your account will be properly credited if there is any amount over paid for the 3rd Quarter. You can request a refund or apply it as a credit to future quarters. The changes set forth in HB 283 do not have an impact on 2016 Quarter 1 or Quarter 2 payments.

No, new employer rates will not be affected. New employer rates are the contribution rates assigned to a contributing employer in business for less than 24-months and are based on the average rate of that employer’s business industry (the NAICS code industry sector).