The purpose of this article is to apprise you of pending changes from tax authorities, such as new tax jurisdictions, agency updates, rate changes, and more.  To keep you informed of ongoing tax compliance measures we are providing the following details regarding upcoming/ongoing changes. 

• isolved is currently undergoing an upgrade to the Vertex payroll tax engine; the upgrade will more accurately handle reciprocity, jurisdictional rules and new legislation. The upgrade is currently in process and should be completed later this year.  This change is being incorporated in the background and will not affect your ongoing payroll activities unless otherwise specified.
• Several states are undergoing updates to their Employer/TPA web portals.  These updates are to provide increased data security as well to streamline reporting requirements.  We have been working with the agencies to ensure continued access and will be reaching out to clients as needed.  For specific details by jurisdiction please see below.  ACTION REQUIRED: if you have employees working in NV and/or VA please see the items below for action required to maintain your access.

State Tax Updates:

• Delaware Withholding
  • The annualized withholding calculation method has been updated to process deductions more precisely as part of our ongoing tax engine enhancements.
• Florida Unemployment
  • The state is implementing a new system for reporting UI Tax.  Employdrive is working with the agency to ensure a smooth transition to the new service which is scheduled to go live for the Fall of 2026.
• Georgia Unemployment
  • The state is updating its system for reporting UI Tax.  Employdrive is working with the agency to ensure a smooth transition to the new service which is scheduled to go live for 4Q26.
• Illinois Unemployment
  • Taxability of EE 401K Qualified Deferrals is being updated from taxable to exempt effective 3Q26.
• Kentucky Unemployment
  • The state is implementing a new system for reporting UI Tax.  Employdrive is working with the agency to ensure a smooth transition to the new service which is scheduled to go live for 3Q26.
• Michigan Unemployment
  • The state has been undergoing an update to their electronic filing system and has provided relief for employers who were unable to file for 1Q26 timely due to access issues. Employdrive has been working with the agency to establish access to accounts.  All clients affected by this change have been notified individually. 
• Nevada Unemployment
  • The state is updating the UI electronic reporting system to improve security.  Action Required: If you currently have credentials to log into your NV UI account, please log into to your account and update your authentication methods to ensure uninterrupted access to your account.
• Oregon Statewide Transit Tax
  • The tax has been updated to self-adjusting, meaning that any changes to the tax rate will automatically recalculate liabilities on the next payroll in the same way as UI tax. This is part of our ongoing tax engine enhancements.
• Texas Unemployment
  • The state is implementing a new UI electronic reporting system.  Employdrive will be reaching out to all impacted clients in 3Q26 with information regarding creating your Employer account and designating Employdrive as your TPA.
• Utah Withholding
  • The withholding tax rate has decreased from 4.5% to 4.45% effective 6/1/26.
  • The standard deduction and withholding allowance credit amounts have increased effective 6/1/26.
• Vermont Unemployment
  • The state is implementing a new system for reporting UI Tax and is currently in the testing phase.  The new system is currently only available for claimants but employer and TPA access is anticipated to be added in the Summer of 2026.  We will provide updates on the progress of the transition as they become available.
• Virginia Unemployment:
  • The state is updating the UI electronic reporting system to improve security.  Action Required: Please visit the website to create/update to the ID.me access method to ensure uninterrupted access to your account.
• Virginia Paid Family and Medical Leave
  • The Virginia Legislature enacted Paid Family and Medical Leave with payroll contributions beginning April 1, 2028 and benefits commencing December 1, 2028.  Additional information regarding the program will be provided in late 2027 in preparation for the new program.
• West Virginia Withholding
  • The annualized withholding calculation method has been updated to process deductions more precisely as part of our ongoing tax engine enhancements.
• Wisconsin Unemployment
  • The state is implementing a new UI electronic reporting system.  Employdrive will be reaching out to all impacted clients in 3Q26 with information regarding creating your Employer account and designating Employdrive as your TPA.

Local Tax Updates:

• Kentucky
  • Corbin, Laurel & Whitley Counties
    • Occupational License Fee of 1% has been added effective 1/1/26.  All clients with EE’s impacted by this change have been notified individually.
  • Elsmere, Kenton County
    • Occupational License fee will increase from 1.25% to 1.75% effective 3Q26.
  • Grant County
    • Occupational License fee will decrease from 2.5% to 2% effective 3Q26.
  • Jenkins, Letcher County
    • Occupational License fee has increased from 1.5% to 2% effective 1/1/26.   All clients with EE’s impacted by this change have been notified individually.
• Ohio
  • Chillicothe, Ross County
    • Tax Rate decreased from 2% to 1.8%: 1Q26 liability has been remitted to the agency and EE’s will be refunded when filing their individual returns for any amounts over-withheld.
  • Coshhocton-Franklin JEDD, Coshocton County
    • Coshocton-Franklin Joint Economic Development District has been added to isolved with a rate of 2%. All clients with work locations affected by this change have been notified individually.
  • Jamestown, Greene County
    • Tax rate increased from 0.5% to 1% and the credit percentage decreased from 100% to 50% effective 1/1/26. All clients with EE’s impacted by this change have been notified individually.
  • Mount Eaton, Wayne County & New Lexington, Perry County
    • Taxes will be collected by the Regional Income Tax Agency effective 3Q26.
  • Vermillion, Erie & Lorain Counties
    • Increased the credit limit from 0.5% to 1% effective 1/1/26.  All clients with EE’s impacted by this change have been notified individually.
  • Warren-Howland-Warren JEDD, Trumbull County
    • Warren-Howland-Warren Joint Economic Development District has been added to isolved with a rate of 2%. All clients with work locations affected by this change have been notified individually.
• Pennsylvania
  • Bally Boro, Berks County
    • Non-resident Tax rate of 1% has been added.  All clients with EE’s impacted by this change have been notified individually.
  • Liberty Township, Susqurhanna County
    • Non-resident & Resident Tax rates of 1% have been added effective 4/1/26.  All clients with EE’s impacted by this change have been notified individually.
  • Philadelphia City, Philadelphia
    •  Tax Rate decreased from 3.74% to 3.735% for residents and from 3.43% to 3.425% for non-residents effective 7/1/26.
• Washington
  • Seattle, King County
    • Seattle Social Housing tax reciprocity has been updated to work only.  All clients with EE’s impacted by this change have been notified individually. 
• West Virginia
  • Weirton, Brooke & Hancock Counties
    • The City Service Fee has increased from $2.00 per week to $5.00 per week, effective 5/17/26. All clients with EE’s impacted by this change have been notified individually.