New York has finally paid off its federal Unemployment Insurance (UI) debt. As part of the Fiscal Year 2026 Enacted Budget, Governor Hochul and Legislative leaders announced that New York would pay off the nearly $7 billion Federal Unemployment Insurance debt, an issue NFIB has been advocating for since the state forced small businesses to close during the pandemic. While small businesses have already paid $5 billion of the state’s debt, this investment will save Main Street from continuing to incur high UI taxes and eliminates the Interest Assessment Surcharge (IAS) for 2025 and beyond. Employers will begin seeing a reduction in federal and state UI taxes in 2026. This is a step in the right direction towards providing much-needed tax relief to small businesses; New York needs to continue doing more like this to help Main Street keep its doors open and lights on.