New York State 2022 Interest Assessment Surcharge

19 Jul New York State 2022 Interest Assessment Surcharge

Background

The New York State Unemployment Insurance (UI) Fund is funded directly by Employer Contributions on their Quarterly Payroll Tax Returns (NYS-45). When an individual claims unemployment, NYS will pay out the benefits from the NYS UI Fund, and the respective employer will be assessed an increased rate (depending on the number of claims).

COVID-19 Pandemic Impact

The COVID-19 Pandemic caused many businesses to lay off a large number of employees in order to stay afloat. As more and more people were laid off, the number of people applying for Unemployment benefits continued to rise. New York State eventually ran low on funds available to be paid from the UI Fund so they borrowed money from the Federal Government, similar to many other states. Unfortunately, New York is still one of only seven states that are still repaying the UI Fund Loan to the Federal Government. As of May 2022, New York has the second largest loan outstanding, with only California having a larger amount.

New York State’s Response

Repayments of this loan have continued to be deferred with each passing tax legislation, until May 31, 2022. Starting July 2022, The New York State Department of Labor will begin to send bills to employers for interest owed for their respective Unemployment wages paid from Q4 2020 through Q3 2021. The notices will refer to the amount due as the “Interest Assessment Surcharge”. This amount will represent .23% of UI wages paid during the respective time period, or approximately $27 per person.

If you have any questions about this, please feel free to contact any member of the Fuller Lowenberg team.