Chamber urges Congress to avoid increase in Federal Unemployment Insurance Tax

The Kentucky Chamber joined a coalition of national and state business organizations today as they urge the United States Congress not to increase the Federal Unemployment Tax (FUTA) in light of already increasing state and federal payroll taxes that have been triggered by high unemployment claims levels and outstanding state loans.

In a letter to Congress, coalition members asked that there be:

• No increase in the Federal Unemployment Tax Act (FUTA) tax base or rate;
• No extension of federal restrictions on states in adopting measures that would reduce the average weekly benefit amount as part of state unemployment solvency legislation;
• No increase in direct spending from employer financed federal unemployment trust fund accounts that are already deeply in deficit.

Employers across the country are experiencing dramatic increases in tax burden related to unemployment compensation, including state experience rate increases, state solvency taxes, assessments to pay for interest on outstanding loans, increases in federal unemployment taxes, and debt service payments in support of bonds and other financing to pay off large outstanding state debts.

Specifically, Kentucky employers are facing a payment of $105 per employee, up from the normal $42 base FUTA per employee tax.

The Kentucky Chamber will continue to work with Congress in an effort to avoid further increase the already increasing employer tax burden and provide state flexibility in addressing state unemployment trust fund solvency.