OhioOn August 30th, 2016,  Ohio repaid the Title XII loan to the federal government. The result of the loan payoff is a significant reduction in the 2016 Federal Unemployment Tax due on January 31, 2017.    Provided the state does not borrow again before November 10, most Ohio employers can expect the FUTA rate of 0.6%.  If Ohio had not repaid their outstanding loan, a rate of 1.80% and a potential BCR add-on of an additional 0.30% could have resulted in a rate of 2.2%.

H.B. 390 allowed the state to borrow from state funds providing the state to repay the outstanding Title XII loan.   The legislation allows employers to pay FUTA taxes at 0.6% on the first $7000, which is a savings of approximately $126 per employee for 2016.    The 2017 Ohio, tax rate notices, will be issued with a surcharge of up 0.5% added to each employer’s rate increases the cost for state unemployment.   Ohio does not expect to continue the surcharge for 2018 as the state fund loan will be repaid.    If Ohio should borrow in the future under the Title XII provision and are unable to repay the loan in two years, a surcharge of 0.5% could be once again added to the unemployment tax rate notice to repay an outstanding Title XII loan and interest assessed by the federal government.

Until the final FUTA credit reduction rates are announced November 10, Ohio employers should continue to budget at a higher rate.  Ohio’s loan payoff leaves only two jurisdictions with outstanding Title XII loans and increased FUTA taxes – California and the Virgin Islands.   The FUTA rates currently in effect for both states are 1.8% if the BCR penalty is not imposed.   The BCR penalty would increase the FUTA rates to 2.2% and 3.1% respectively.   However, waivers of the BCR penalties were waived.

Loan balances for the remaining two states continue to decrease as a result of increased FUTA deposits, which are a result of increased employee reporting.    If California or Virgin Island were to pay off their outstanding loan balance before November 10, 2016, the additional FUTA taxes would be eliminated.    We do not expect either jurisdiction to repay their loan by the November deadline.   California expects to repay its loan in 2017.  The Virgin Islands has not released a statement as of the issuance of this newsletter.


Contact CCC to see how we can save your organization time and money.
Contact our Sales Team
(800) 207-6926

Featured Videos

View All Videos

Latest News

Close

Sales

Your Name:*

Title:

Company Name:*

Company Address:

Company City:

Company State:

Company Zip:

Number of Employees:

Your Email:*

Phone Number:*

Fax Number:

Check the boxes below if you wish to receive information on any of the following:

Unemployment Cost ControlTax Credits & Incentives (WOTC)Employment / Wage Verification

Your Message:

Employment & Income Verfication

Your Name:*

Title:

Company Name:*

Company Address:

Company City:

Company State:

Company Zip:

Number of Employees:

Your Email:*

Phone Number:*

Fax Number:

Your Message: