Q: What is the Interest Assessment Surcharge and why is it being assessed?
A: Due to the economic downturn in 2008 and 2009, the Unemployment Insurance Trust Fund has not had enough funds to pay for claims filed by unemployed workers, and as a result, New York State borrowed $3.5 billion from the federal government, on behalf of employers, to cover the difference. The debt from these federal loans is being reduced at a rapid rate due to the Governor's Unemployment Insurance Reform legislation, economic development policies, and the improved economy. By the end of 2014, the balance of the loan is expected to be just one-half of what was owed prior to the Reform. While the loan balance is decreasing at a fast rate, State law requires that New York State employers pay the interest on the federal loan - the Interest Assessment Surcharge (IAS). New York State employers owe the federal government $61 million in interest for 2014, which must be paid by September 30, 2014. The maximum amount that most employers will be assessed in 2014 is $5.95 per employee compared to $12.75 per employee in 2013 - more than a 50% reduction.
Q: What happens if the interest is not paid to the federal government?
A: Failure to pay the interest due can have severe consequences. Employers could see an immediate increase in their current federal regular FUTA rate of 1.5% to 5.4%, an increase of more than double the current amount due from each employer in their federal unemployment, (FUTA) next year. The federal government could also withhold funds needed to administer New York State's Unemployment Insurance Program for failing to make these interest payments.
Q: What is the section of the law which imposes the IAS?
A: Article 18, Title 6, Section 581-d of the New York State Labor Law requires the State to assess employers for interest owed to the federal government. This law can be found at www.labor.ny.gov.
Q: How was my IAS calculated?
A: Your IAS was calculated using the wages subject to contributions for the current payroll year (the fourth quarter of 2012 through the third quarter of 2013) and multiplying those wages by the IAS rate of .07%. As mentioned above, the maximum amount that most employers will be assessed is $5.95 per employee compared to $12.75 per employee in 2013. The IAS rate for 2014 was reduced over 50%.
Q: When is my payment of the IAS due? Can I get an extension?
A: Payment is due 30 days from the date of the billing notice. No extensions can be granted because the payment due to the federal government must be timely.
Q: Who should I make my check payable to, and where do I send the payment?
A: Checks should be made payable to "NYS Unemployment Insurance" and sent to "NYS Unemployment Insurance, P.O. Box 4301, Binghamton, New York 13902-4301."
Q: Is this a one-time billing, and what happens if I do not pay my IAS?
A: IAS will be billed annually until the loans to the federal government have been fully paid. It is anticipated that the federal loan will be fully paid by 2016. IAS is subject to the same collection processes as normal contributions, including, but not limited to, legal actions to enforce a debt.
Q: What if I did not receive an IAS bill or have questions regarding the IAS bill?
A: If you have any questions, please call the Employer Accounts Adjustment Section of the Unemployment Insurance Division at 1-888-899-8810 and select option 1, or go to our agency website http://www.labor.ny.gov/.
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