NYS 2005 Employer Assessment
NYS 2005 Employer Assessment
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NYS 2005 Employer Assessment
SOURCE: Workforce New York, November 2005
New York State borrowed $400 million from the federal government in 2003 to keep the NY state unemployment insurance fund solvent in the wake of a surge of layoffs post-9/11. Federal law provides the borrower two years to repay the debt before a mandatory federal FUTA tax assessment is levied to make up the debt. Additionally, after the two year period expires, interest on the unpaid loan must be paid. NYS law provides that the iterest payment is to be funded annually by an Interest Assessment Surcharge on NYS employers. There will be an Interest Assessment Surcharge for 2005 at the rate of 0.05%. The assessment will be made on the prior year payroll U.I. wages, but this year, it will be assessed at the time your first quarter report is posted and will be billed in our regular billing process. There will not be a separate IAS billing. The payment will be due thirty (30) days from the date of the billing notice. If you have further questions regarding this matter, please call 1-888-899-8810.
As of November 2004, the state defaulted on the federal loan. This marks the first time since 1992 that a state has defaulted on a FUTA loan, triggering federal action to recoup the loan amount. All New York State employers are required to contribute to repay the Federal loan, calculated as an increase in the FUTA tax rate.
To summarize, interest on the unpaid balance of the Federal FUTA loan is paid by NYS employers to the New York Department of Labor via a special tax assessent. The principal on the loan is being paid by NYS employers via increased FUTA taxes.
