NC Businesses Will Not Have To Pay An Expected Unemployment Insurance Tax Increase
The U.S. Department of Labor has waived an anticipated federal unemployment tax increase on North Carolina businesses, as the state continues to pay millions it borrowed from the federal government to pay for state insurance benefits.
The waiver reduces employers’ tax hike for the 2014 tax year up to $65 per employee, or about $180 million collectively for employers across the state, officials said.
North Carolina officials sought the waiver in April, and the labor department granted it because the state is on pace to pay off billions it borrowed from the U.S. Department of the Treasury to pay for state unemployment insurance claims, said Dale Folwell, heads of the state Division of Employment Security.
The state's debt peaked at $2.8 billion and was $465 million as of Nov. 7, according to Department of Labor data, the Raleigh News & Observer reported.
"Any time that something of this nature could have this impact on our employers in North Carolina, it's obviously, it's a great letter to receive,” Folwell said on Wednesday.
In 2009, North Carolina ran out of money to pay for unemployment insurance. The labor department raised unemployment taxes – known as the Federal Unemployment Tax Act or FUTA – on employers in North Carolina and other states that borrowed to pay benefits.
North Carolina is on track to pay off the debt by May, 2015, Folwell said.