Q: Why is the IAS 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 from the federal government to cover the difference. The debt from these federal loans has grown to $3.5 billion, with $85 million in interest due to the federal government for 2013. The New York State Department of Labor is required by law to assess a temporary Interest Assessment Surcharge (IAS) on employers to cover the interest due on the federal loan each year.
Q: What happens if the interest is not paid to the federal government?
A: Failure to pay the interest due can have severe consequences. The federal government has the power to de-certify New York State's Unemployment Insurance Program, which would cause each employer in New York State to experience an increase in its federal unemployment due to the loss of a credit of up to 5.4% against FUTA. The federal government is also empowered to withhold funds needed to administer New York State's Unemployment Insurance Program.
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 2011 through the third quarter of 2012) and multiplying those wages by the IAS rate of .15%. The maximum amount that employers will be assessed is $12.75 per employee.
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, or go to our agency website www.labor.ny.gov.
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