NFIB was one of only a few groups that actively supported this tax credit and testified for the $258 million tax credit.
Small business received its first victory early in the 2016 session when a $258 million one time unemployment insurance tax credit passed the legislature and was signed into law by Governor Dayton. NFIB was one of only a few groups that actively supported this tax credit and testified for it.
As mentioned, the legislation provides for a one time $258 million tax credit that will reduce unemployment insurance taxes by approximately 25% from what a business paid in 2015. Those with larger unemployment insurance tax bills will see a greater reduction with the exception of maximum rate payers who were excluded from the legislation (typically contractors or landscapers who have annual layoffs). Businesses that have already paid all their 2016 unemployment taxes will not see the tax credit till 2017. Those that have remaining payments for 2016 will see the credit this year.
The legislation also created a mechanism where automatic tax credits would occur when there are large future surpluses. This is a good going forward provision that will keep surpluses in the fund from growing to extreme heights.