New York will again be assessed a Federal Unemployment Tax Act (FUTA) credit reduction for its outstanding $6 billion in Unemployment Insurance (UI) debt incurred during the COVID -19 pandemic. This is the third year in a row New York has been assessed a credit reduction.

For 2024, New York businesses will be assessed a general FUTA credit reduction of 0.9% on wages paid to employees. The reduction will require employers to pay a federal unemployment tax rate of 1.5%, or up to $105 for each employee when applied to the federal unemployment-taxable wage base of $7,000. This is in addition to the highest possible UI tax rates, averaging an additional $250 per employee per year, and an annual Interest Assessment Surcharge (IAS) of $15 per employee that businesses will continue to pay until the multibillion-dollar debt has been satisfied.

New York is now one of only two states that still owe money to the federal government and did not use any of the billions in federal COVID relief to help pay off its federal UI advance. New York public and state policy decisions led to the depletion of the Unemployment Trust Fund. Main Street should not and cannot be compelled to shoulder this weight alone; the state must do more to address the Unemployment Insurance crisis in the FY 2026 budget.