Title XII advances are a means for insolvent states to obtain the necessary funding to continue payment of unemployment claims.  If the loans are not repaid by November 10 of the following year, the state must include a FUTA credit reduction for employers to repay the loan.  Virgin Islands and California began the year with a Title XII advance balance, therefore, they had the potential for being FUTA credit reduction states.  Based on a document posted to the U.S. Department of Labor (USDOL) website this week, the only jurisdiction with a credit reduction for the coming year is Virgin Islands.  California was successful in paying off its Title XII loan this year and did not initiate a new loan prior to the November 10 deadline.

Therefore, Virgin Islands will be the only credit reduction jurisdiction for the coming year.  Below is information as it relates to Virgin Islands. They were successful in their request for credit relief as indicated so they did not have the 1.3% BCR add-on in addition to the FUTA credit reduction.

If you have questions about potential FUTA credit reductions, please contact Wayne Rottger, Director of Tax at wrottger@corporatecostcontrol.com.


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