The New York Notice of Unemployment Tax Rates (Rate Notice) are issued in late February or early March.   New York is by far the most difficult to evaluate the best opportunity or group of opportunities to request.   New York provides employers with the option for a voluntary contribution, forming or adding to a joint account, write-off a portion of the negative reserve balance, improve the ratio by four brackets and a combination of each of these opportunities.

The voluntary contribution and the joint account option are left up to the employer to determine the profitability.    Employers with multiple accounts would want to evaluate the voluntary contribution separately, form a joint account without the voluntary contribution and also review the voluntary contribution, including the joint account.   To avoid a negative write off, an employer has the option to pay an amount requested by the state.   If the negative write-off occurs, the employer will have a maximum rate for three years.   In some cases, it is favorable to pay the amount being written off by the state to obtain a more favorable rate for the following year.  

The final opportunity for an “Improved Rate” is driven by New York.  If an employer has a negative balance and their preceding payroll year wages are greater than or equal to 80% of the average taxable payroll, the state will issue a Rate Notice with a special paragraph stating that the reserve ratios has been improved by four percentage points.   The limitation on this by the state is that the employer’s normal rate cannot be less than 6.1%.

So how can an employer be sure they are taking the correct steps to obtain the most favorable opportunity for savings?   The Tax Analyst at Corporate Cost Control are ready to analyze all opportunities for savings.   In February, we should receive the transcripts for all New York employers who have our service.  The transcripts provide information that is not printed on the Rate Notice and a breakdown of the combined figures.  Each opportunity is evaluated separately and in conjunction with other opportunities.

Located at the top right-hand corner of the Rate Notice, is a Rate Code.   The code identifies the status of the assigned rate.    The following are the Codes and what they represent:

• Q= “Qualified Employer”- has a positive reserve balance and no other codes apply
• G= “Negative Account Percentage” – the reserve balance for this employer is negative and a negative write off has not occurred that effected the current year’s rate
• E = “General Account Transfer” – employer had a negative write off in prior years that effected the current year’s rate.
• A = “New Employer“  – the employer has less than four quarters of taxable payroll.
• F = “No renumeratation in Current Payroll Year” – zero payroll for four quarters in the computation period.

Please keep in mind, that a merger, acquisition, or reorganization will affect any tax opportunity requested and could negate the savings calculated.   If you have any questions, please contact your CCC Tax Analyst.