- Yellow highlighted areas indicate those states that have not yet released their wage bases. This information will also be listed on TRICOM.com and updated as information becomes available.
FUTA Reduction States:
For tax year 2022, there are four states and the Virgin Islands that will have FUTA reduction charges for 2022 and potentially 2023. The FUTA rates for 2022 for California, Connecticut, Illinois, and New York will be increased by .03% to .09%. If the federal loans are not repaid by 11/10/2023, the 2023 rate will increase by another .03% to 1.2%. TRICOM will be monitoring these loans and will update our clients as the 2023 progresses. TRICOM has withheld the extra FUTA funds for most of 2022 already; there may be only small amounts owed for the FUTA change for 2022. To combat the FUTA increase in CT, the state has reduced unemployment rates for 2023 by .2%.
State Tax Table Changes:
The following states have changed their tax tables for 2023 (please keep in mind other states may be added to this list):
- Arizona
- California
- Maine
- Montana
- Nebraska
Federal Tax Changes:
- Social Security Wage Limit has increased from $147,000 to $160,200. This is an increase for both the employee and the employer of $818.40. The additional .9% Medicare tax on employee wages over $200,000 is still in place for 2023
- 401K Limit for 2023 increased to $22,500 from $20,500; the limit on the contribution for individuals aged 50 and over increased by $1,000 to $7,500.
- SIMPLE Retirement Plan is at $15,500 up from $14,000.
Standard Deduction Changes:
- Single & Married Filing Separately: $13,850
- Married Filing Jointly: $27,700
- Head of Household: $20,800
Additional State & Federal Tax Topics:
- For 2022, Oregon’s workers’ compensation premium assessment rate will stay at 9. In addition, Oregon Worker’s Benefit Fund will remain the same at 2.2 cents per hour. One-half of this amount is paid by the employer.
- California’s 2023 SDI rate is .9% (down from 1.1% in 2022) on the first $153,164 of wages.
- New York employee paid family leave (PFL) contribution will be .511% similar to 2021. However, the annual maximum is $423.71.
- Effective January 1, 2023, employee temporary disability insurance (TDI) and Family Leave Insurance (FLI) rates in New Jersey have decreased. The employee TDI rate has decreased from .14% to 0%. The FLI rate has decreased from .14% to .06%. The taxable wage base for these taxes has increased from $151,900 to $156,800.
- Several states have established state-run mandatory automatic enrollment retirement plans. It is important for employers to be aware of these programs due to the payroll deduction requirements. Several states have active state-sponsored auto individual retirement (IRA) programs: California, Connecticut, Illinois, Maryland, Oregon, and Washington.
