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. 

• the isolved upgrade to the Vertex payroll tax engine has been completed.
• 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.  NEW and/or 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:

• *NEW* Arkansas Withholding
  • The supplemental withholding tax rate has been decreased from 3.9% to 3.7% effective 1/1/26.  Any EE's who have been impacted by this change can adjust their withholding for the balance of the year by completing a new AR 4EC form or receive a refund when filing their individual income tax return at the close of the year.
• 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 on August 17th 2026.
• *NEW* Kentucky Withholding
  • MyTaxes, the KY WH portal, will be unavailable from August 5th thru 13th of 2026 while the agency updates the system.
• *NEW* New York SDI and PFL
  • The state has changed the taxability of Group Term Life over $50,000.00 from taxable to exempt for NY SDI and NY PFL effective 1/1/26.  All clients with EE's 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.
• 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.
• 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.
• 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:

• *NEW* Kentucky
  • Falmouth, Pendleton County
    • Occupational License Fee of 1.5% has been added effective 7/1/26.
  • Irvington, Brekinridge County
    • Occupational License fee of 0.25% has been added effective 1/1/26.  All clients with work locations affected by this change have been notified individually.
• *NEW* Ohio
  • Brimfield-Kent JEDD, Portage County
    • Collector has been updated to the Regional Income Tax Agency effective 7/1/26.
  • Jersey-New Albany JEDD's 1,2 and 3; Licking County
    • Jersey-New Albany Joint Economic Development Districts 1, 2 and 3 have been added to isolved with a rate of 2% effective 5/1/26. All clients with work locations affected by this change have been notified individually.
  • Kent-Franklin JEDD, Portage County
    • Collector has been updated to the Regional Income Tax Agency effective 7/1/26.
  • Pemberville, Wood County
    • Collector has been updated to the Regional Income Tax Agency effective 7/1/26.
• *NEW* Oregon
  • Eugene, Lane County
    • Community Safety Payroll Tax withholding table has been updated effective 7/1/26.
• *NEW* Pennsylvania
  • 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.