Press Release:
Congresswoman Claudia Tenney (NY-24), Member of the Ways and Means Committee, sent a letter to New York Governor Kathy Hochul urging her to prioritize repayment of the state’s billions of dollars in outstanding federal Unemployment Insurance (UI) loans.
The Federal Unemployment Tax Act (FUTA) imposes a 6.0 percent gross federal unemployment tax rate on the first $7,000 paid annually by employers to each employee, resulting in a maximum federal tax of $420 per employee per year. Employers in certain states may credit up to 5.4 percentage points of state unemployment taxes paid against the 6.0 percent tax rate, meaning that the typical FUTA tax is $42 per worker per year.
However, employers in states whose unemployment insurance funds have outstanding federal advances for two or more consecutive years, like New York, could have their FUTA credit reduced by an additional 0.3 percent for each year the outstanding balance is not repaid in full. This means that New York small businesses, through increased employer taxes, will bear the brunt of Governor Hochul’s irresponsibility and inaction in paying back the state’s federal UI loans.
“Governor Hochul’s inaction in paying back New York’s outstanding federal UI loans in a timely manner irresponsibly places that burden on our small businesses and hardworking families,” said Congresswoman Tenney. “At a time of skyrocketing inflation due to President Biden and Governor Hochul’s far-left fiscal policies, Main Street businesses across New York are struggling and are now facing even higher taxes as a result of New York failing to repay its outstanding federal UI loans. During the COVID-19 pandemic, far-left officials in New York forced businesses to shut down, causing disastrous effects on our economy. Now, these same businesses will be forced to help repay the state’s federal UI loans despite the fact that the state had other means to repay the debt. This is reckless management from Governor Hochul and only serves to further hurt New York businesses while they’re already reeling from many other pressures. Today, I sent a letter to Governor Hochul urging New York to prioritize repayment of the outstanding federal UI loans to prevent additional harm to our small, local businesses and workers in New York.”
