Making
Voluntary Unemployment Tax Contributions
If a state uses the reserve ratio method described in the previous section to
arrive at the contribution rate charged to a business, then the business may
have the option to contribute additional funds into its account. By doing so, it
can improve its experience rating and thereby reduce the contribution rate
charged by the state. In most cases, a company must make the decision to contribute additional funds within 30 days
of the date when a state mails its notice of contribution rates to the company.
The decision to pay additional funds to the state should be based on a
cost-benefit analysis of the amount of funding required to reduce the
contribution rate versus the reduced amount of required contributions that will
be gained in the next calendar year by doing so.
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