The U.S. Department of Labor (DOL) released its list of potential FUTA credit reduction states for 2023. These states already had a credit reduction of 0.3% for 2022 and may face a reduction of 0.6% for 2023. They are:
- New York
The U.S. Virgin Islands are also facing a potential credit reduction of 4.9% The final determination will be made after November 10, 2023.
However, the Illinois Department of Employment Security announced the state’s repayment of its FUA trust fund load, which would mean the state is unlikely to face a credit reduction in 2023 unless it borrows again and has a loan balance on November 10, 2023.
Any states with outstanding Federal Unemployment Account loans on January 1 for at least two consecutive years are subject to a credit reduction of the Federal Unemployment Tax on November 10 of the second year. Each year the loan continues to be unpaid, the credit reduction increases by 0.3%.
This article is informational and does not constitute legal or financial advice. Consult with an employment lawyer or accountant for additional clarification on how these changes impact your company.