In an effort to improve Connecticut’s Unemployment Insurance (UI) Trust Fund solvency, the legislature passed Public Acts 21-200 and 22-67 to implement reforms that were achieved through a collaborative effort of business and labor. Changes to the tax and benefit system, plus the inclusion of indexing various tax and benefits measures, will promote long term UI Trust Fund solvency; reduce employer costs; build in cost predictability to support employer fiscal planning; and stabilize UI benefit payments to unemployed workers.

If you are a Third-Party Agent (TPA) or a Federal/State Employment Taxes (FSET) vendor, please share this important communication with your client(s).

Under the Public Acts, the following UI Tax changes are effective January 1, 2026:

• The taxable wage base (TWB) increases from $26,100 to $27,000.
• The state’s new employer rate decreases from 2.2% to 1.9%.
• The state’s minimum charged rate is 0.1%.
• The state’s maximum charged rate is 10.0%.
• To minimize the short-term impact of the TWB increase, charged rates in calendar year 2026 will be reduced by 1.125. As such, the state’s maximum charged rate for calendar year 2026 will be reduced to 8.9%.
• The state’s fund solvency tax rate is 1.0%. 
• If the average benefit ratio of all employers within a sector of the North American Industry Classification System (NAICS) increases by 1% or more over the average benefit ratio of that sector from the previous year, then the benefit ratio of each employer within such sector shall have their individual benefit ratio reduced by one-half of the increase.
• The minimum and maximum contribution rates for 2026 will be 1.1% and 9.9%, respectively.

Example of Contribution Rate calculation for calendar year 2026:

Employer A is eligible to receive a charged rate, which is calculated based on the amount of UI benefits charged to their account divided by the taxable payroll reported.  The employer has the following UI benefit charges and taxable wages and is not eligible for an industry sector benefit ratio adjustment:

• Experience Year 2023: UI Benefit Charges = $500
• Experience Year 2023: Taxable Wages = $10,000 
• Experience Year 2024: UI Benefit Charges = $500
• Experience Year 2024: Taxable Wages = $10,000
• Experience Year 2025: UI Benefit Charges = $500
• Experience Year 2025: Taxable Wages = $10,000
• $1,500 / $30,000 = 0.0500 Benefit Ratio
• 0.0500 Benefit Ratio = 5.0% Preliminary Charged Rate
• 5.0% / 1.125 divisor = 4.5% Final Charged Rate (rounded to the next higher one-tenth of one percent)
• 4.5% Final Charged Rate + 1.0% Fund Solvency Tax Rate = 5.5% 2026 Contribution Rate

Under the Public Acts, the UI Benefits changes are effective January 1, 2026:

• In light of the indexing aspect of the public acts, the minimum weekly UI benefit payment will increase from $42 to $44. However, the minimum benefit will revert to $15 if the federal government provides a fully federally funded supplement to the individual’s weekly benefit amount. The minimum base period earnings requirement increases from $1,680 to $1,760.  However, the minimum base period earnings requirement will revert to $600 if the federal government provides a fully federally funded supplement to the individual’s weekly benefit amount.
• In light of the public acts’ freezing of the maximum weekly UI benefit during the four years from October 2024 through October 2028, the maximum WBR remains at $721.

This information is available on our website: Unemployment Insurance Tax

For UI Tax questions, please email the Employer Status Unit at DOL.Status@ct.gov 
For UI Benefits questions, please email the Legal Division at DOL.LegalDivision@ct.gov