Rescue plan

Alabama allocates American Rescue Plan Act funds to replenish unemployment trust fund – Ballotpedia News

The Alabama Legislature passed a plan for spending American Rescue Plan Act (ARPA) funds on Jan. 27, 2022, allocating $79.5 million of the $2.1 billion ARPA allocation from l to replenish the state unemployment trust fund. After the bill passed, Alabama Department of Labor Secretary Fitzgerald Washington announced that the state had moved to a lower tax rate and that the unemployment insurance tax burden for Estimated state employers would decline 29%.

Alabama unemployment taxes vary depending on the solvency of the state’s unemployment trust fund. Due to increased unemployment claims during the COVID-19 pandemic, the fund was depleted. Without the $79.5 million benefit, unemployment premiums would have increased by about 3% in 2022.

Alabama employers must pay unemployment insurance taxes on the first $8,000 each employee earns each year.

Unemployment Insurance refers to a joint federal and state program that provides temporary monetary benefits to eligible laid-off workers who are actively seeking new employment. Eligible persons receive unemployment compensation as a percentage of their lost wages in the form of weekly cash benefits while they search for new employment.

The federal government oversees the general administration of state unemployment insurance programs. States control specific features of their unemployment insurance programs, such as eligibility requirements and duration of benefits.

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