South Dakota will use federal Coronavirus Relief Fund dollars to replenish the South Dakota Unemployment Compensation Trust Fund.
Governor Kristi Noem says the state transferred $45.6 million to the trust fund. The CARES Act allows for states to utilize CRF dollars to replenish depleted unemployment trust funds, and doing so will allow South Dakota to avoid a tax increase on South Dakota employers.
The tax structure for the South Dakota Unemployment Compensation Trust Fund is designed to maintain an average high cost multiple of 1.6. This means the Trust Fund balance is 160% of the three highest cost years in the Trust Fund’s recent history, typically a period covering about 20 years. However, the level of unemployment benefit payments issued since the start of the COVID-19 pandemic has decreased the balance of the fund to $90 million, which is an AHCM of 1.2.
To learn more about the South Dakota Unemployment Compensation Trust Fund, visit dlr.sd.gov.
