October 10 , 2006
By Dylan Skriloff
Business owner's annoyed by last year's $42 reduction in FUTA tax credits on unemployment insurance, will be relieved to hear the state's unemployment insurance fund is back in good standing with the federal government.
This year the tax will return to its normal level of $56. In 2004 and 2005 respectively New York business owners have had to pay an extra $21 and $42 because New York State's unemployment fund owed the federal government several hundred million dollars. The debts, which totaled $433 million in 2004 and $121 million in 2005, have now been fully repaid and the Federal Government has readjusted the state's FUTA tax credits.
The FUTA tax rate is 6.2% on the first $7,000 of an employee's income, but under normal conditions, employers who pay their state taxes in full and in a timely manner receive a credit of 5.4%, thereby paying 0.8% or $56 per employee. The state government had reduced 0.6% of that credit so that it could pay back the federal government. The state's unemployment insurance fund had been in the red since 2002. |
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