SCUF is suspended for the 2026 tax year and will be reinstated on January 1, 2027.
What is SCUF?
During the 2018 Legislative Session, the General Assembly enacted the Service Capacity Upgrade Fund (SCUF) (HB 487, Section 139). Money diverted to SCUF is used “solely for acquisition and upgrading of the technology base, program integrity functions, and service delivery capacity in support of the programs administered by the Office of Unemployment Insurance” (KRS 341.243(2)). The Secretary of the Education and Labor Cabinet determines, per Kentucky statute, whether to instate the SCUF rate for any given year.
SCUF is suspended for the 2026 tax year. When SCUF is reinstated on January 1, 2027 (per SB 129 (PDF, opens in a new tab)), your contribution rate will be reduced by 0.0115%. There is no increase or decrease in the total amount of tax you will pay. This reduction will divert 0.0115% of the contributions that would have been applied to your employer reserve account and instead fund SCUF. You may not claim SCUF payments as a credit on your Federal Unemployment Tax filings. See the table below for a summary of recent SCUF rates.
Summary of recent SCUF rates
| Year | Contribution Rate Schedule | SCUF Rate |
|---|
| 2027 | A | 0.0115%* |
| 2026 | A | 0.0%^ |
| 2025, Q1 | A | 0.075% |
| 2025, Q2–Q4 | A | 0.0%^ |
| 2024 | A | 0.075% |
| 2023 | A | 0.075% |
| 2022 | A | 0.0%** |
| 2021 | A | 0.0%** |
Important updates
SCUF is not in effect for 2026.
SB 129 (PDF, opens in a new tab) reinstates SCUF beginning January 1, 2027. The SCUF charge will reduce contribution rates by 0.0115% and will continue until the fund reaches a capacity of $15 million, or the unemployment Trust Fund balance falls below $811,005,000. The SCUF charge will not be retroactive to 2026.
Example of SCUF rate reductions for 2027
Example of SCUF rate reductions for 2027, Rate Schedule A
| 2027, Rate Schedule A |
|---|
| Established Contribution Rate | SCUF Rate | Modified Contribution Rate |
|---|
| 0.30% | 0.0115% | 0.2885% |
| 0.40% | 0.0115% | 0.3885% |
| 0.50% | 0.0115% | 0.4885% |
| 0.70% | 0.0115% | 0.6885% |
| 1.00% | 0.0115% | 0.9885% |
| 1.30% | 0.0115% | 1.2885% |
| 1.50% | 0.0115% | 1.4885% |
| 1.80% | 0.0115% | 1.7885% |
| 2.00% | 0.0115% | 1.9885% |
| 2.10% | 0.0115% | 2.0885% |
| 2.20% | 0.0115% | 2.1885% |
| 2.30% | 0.0115% | 2.2885% |
| 2.40% | 0.0115% | 2.3885% |
| 6.50% | 0.0115% | 6.4885% |
| 6.75% | 0.0115% | 6.7385% |
| 7.00% | 0.0115% | 6.9885% |
| 7.25% | 0.0115% | 7.2385% |
| 7.50% | 0.0115% | 7.4885% |
| 7.75% | 0.0115% | 7.7385% |
| 8.25% | 0.0115% | 8.2385% |
| 8.50% | 0.0115% | 8.4885% |
| 9.00% | 0.0115% | 8.9885% |