Illinois, also known as the Land of Lincoln and the Prairie State, was the home of Abraham Lincoln, the birth place of Walt Disney, and home of the first McDonald’s and the first sky scraper. It is the 5th most populous state in the country, and the most populous state in the Midwest with a population of nearly 13 million. While known for being home to Chicago, one of the largest and most economically active cities in the country, Illinois is also home to a vast amount of farmland and is a major producer of soybeans and corn. Illinois is also home to some of the world’s largest food manufacturers including Keebler and Nabisco.
Illinois has maintained an unemployment rate higher than the national average since the beginning of the Great Recession. The state ended 2015 with an unemployment rate of 6.1%, while the national average came in at 5.0%. It reached its highest point in December of 2009 at 11.2%, well above the national rate of 10.0% that year. Like most states, Illinois did not have enough funding to support the increase in unemployment claims filed during the Great Recession. The state borrowed from the federal government to continue to fund their strained unemployment program. They used employer financed bonds to repay their federal debt as the economic situation improved. Illinois currently has a positive balance in its state unemployment trust fund. However, the state is still not in a financial position to fund unemployment through another recession (based on the latest AHCM of 0.34).
The taxable wage base in Illinois is $12,960, and the current average tax rate for employers is 3.8% (as a percentage of taxable wages). The maximum duration of unemployment payments in Illinois is currently 26 weeks, which is in line with the national average. However, the maximum weekly benefit amount that can be paid on an unemployment claim in Illinois is quite a bit higher than the national average of $441, at $595 per week. This translates to a maximum total claim value of $15,470. However, because most claimants do not collect the full maximum liability, the average claim payout for the state of Illinois is $5,524.
Illinois is one of a small number of states that charge only one employer for unemployment benefits paid to a claimant. The majority of states distribute unemployment liability proportionally between all Base Period employers. However, in Illinois, the last 30 day employer is the only chargeable employer on an unemployment claim. What this means is that, if an employer was the most recent company to employ a claimant for a minimum of 30 days, they will be liable for all the benefits paid should that person file for an be granted unemployment benefits. This also means that a company that employed that same individual more recently, but for less than 30 days, would not be considered chargeable for the same claim. This process of determining employer chargeability is very important to understand for managing unemployment costs and tax rates.