New York and New Jersey are assessing surcharges on employers due to the increased amount of unemployed workers. The payments for claims filed by New York unemployed workers exceeded the balance in the Unemployment Insurance Trust Fund since 2008’s economic downturn. This led to New York borrowing funds from the Federal government to cover the immense amount of claims. New York has accumulated debt of over $3.5 billion and attached to that debt is $85 million of interest which is due to the Federal government. To pay back the interest, the New York State Department of Labor is required by law to assess an interest assessment surcharge (IAS) on all eligible employers. Eligible employers consist of those who pay unemployment insurance contributions to the State of New York.
Calculate your IAS:
1. Use wages subject to contributions from the 4th quarter of 2012 to the 3rd quarter of 2013
2. Multiply those wages by .07 % (the IAS rate)
3. The maximum amount you will be assessed is $5.95/employee (less than half of what was assessed in 2013)
Please note: This payment is due 30 days after the date of the billing notice.
For those employers subject to state unemployment insurance in New Jersey, you were recently mailed the annual Combined Assessment Bill and Rate Computation notice. Like employers in New York, payment is due 30 days from the date on the notice, that being July 25, 2014. Should your payment be received subsequent to that date, the agency will assess interest at the prevailing rate until the payment is received.
Should you have any questions about this alert and how it affects you, please don’t hesitate to contact us at 631-582-1600.
Written by Nicholle Mezier, CPA, MBA. If you would like to learn more about this topic, please contact:
Shari Diamond, CIA
Shari has been with Cerini & Associates, LLP since 2008 where she works primarily with the firm’s school district clients providing internal audit and claims audit services. She has over twenty years’ experience performing internal audits, risk assessments, and compliance reviews, as well as recommending processes to strengthen the internal controls environment while increasing efficiencies. Her prior experience at PWC and Northrop Grumman included performing Information Technology audits.