By meeting those standards, Vermont employers who participate in the program and are current in their state contributions may take a tax credit against their Federal Unemployment Taxes. Contributions - Unemployment benefits are financed by contributions from covered employers. The funds collected by the states are held in the unemployment trust fund in the U.S. Treasury, and interest is credited to each state's account. Money withdrawn from the state's account can only be used for benefits or to refund contributions erroneously paid. The standard contribution rate is 5.4 percent, the maximum allowable tax credit against the Federal tax.
States can use experience of the business to vary contributions from the standard rate.
Vermont has five rate schedules. Each schedule has 20 possible rates that are applied according to the unemployment experience of the business. Did you know - More than one half of Vermont employers pay the minimum contribution. The cost of the administration of the program is paid by the U.S. government through a categorical grant to the state. The grant increases and decreases with the workload.