DOL Special Unemployment Assessment

July 21, 2011

DOL Special Unemployment Assessment

As most of you know, there exists an option for non-profit organizations whereby they may elect to provide direct reimbursement of unemployment claims instead of paying into an account each quarter. If you have chosen this option, and therefore, are paying unemployment out of pocket, you do not have to pay the tax that is the subject of the announcement below. This includes any providers that are members of the Non-Profit Trust. If you have any questions about your status, please call the Employer Accounts Adjustment Section of the UI Division at 1-888-899-8810. Toni…..

Special Bulletin for All Employers Regarding the NYS Interest Assessment Surcharge for 2011

*Information regarding the Unemployment Interest Assessment Surcharge Recently Sent to Your Nonprofit*

The recent national recession led to record high levels of unemployed workers receiving unemployment insurance benefits. As a result, since 2009 New York State has borrowed over $3 billion from the federal Unemployment Insurance (UI) Trust Fund.

The American Recovery and Reinvestment Act (also known as the Recovery Act) provided interest-free loans to New York and other states with insolvent Trust Funds during calendar years 2009 and 2010.Thus far, Congress has not extended the interest-free loan provisions into 2011. As it stands now, New York must pay approximately $95 million in interest on these loans to the federal government by September 30, 2011.

In order to pay the interest due for 2011 on these federal loans, New York State is required by state law to assess a temporary charge on employers, called an Interest Assessment Surcharge (IAS).

Should Congress extend the interest-free loan provision, they will either credit your account or refund the money
paid.

New York's Interest Assessment Surcharge rate for 2011 is 0.25%. Each employer's surcharge amount is determined by multiplying the total taxable wages in the most recently completed payroll year (October 1, 2009 through September 30, 2010) by the IAS rate of 0.25 percent. Therefore, the maximum amount that most employers will be assessed is $21.25 per employee.

Payment of the IAS is due by August 15, 2011.

If you have any questions, please call the Employer Accounts Adjustment Section of the UI Division at 1-888-899-8810.

Category: ACL Updates