Payroll Perspectives: Lingering State Loan Balances Could Reduce FUTA Credits and Raise Costs for Employers in 2013

As of July 31, 2013, the U.S. Department of Labor (DOL) website showed that 18 states have outstanding federal loan amounts that were borrowed from the federal government to continue to pay unemployment insurance (UI) benefits.

Of these states, 17 (19 if Delaware and Vermont borrow again before Nov. 10) may potentially see a Federal Unemployment Tax Act (FUTA) credit reduction for calendar year 2013. (Kansas has borrowed on a short-term basis and is anticipated to repay its loan before the Sept. 30/Nov. 10 cut-off dates.)

Indiana and South Carolina employers potentially face an even higher FUTA cost this year ...