![]() ![]() Until the final FUTA credit reduction rates are announced November 10, Ohio employers should continue to budget at a higher rate. If Ohio should borrow in the future under the Title XII provision and are unable to repay the loan in two years, a surcharge of 0.5% could be once again added to the unemployment tax rate notice to repay an outstanding Title XII loan and interest assessed by the federal government. Ohio does not expect to continue the surcharge for 2018 as the state fund loan will be repaid. The 2017 Ohio, tax rate notices, will be issued with a surcharge of up 0.5% added to each employer’s rate increases the cost for state unemployment. ![]() The legislation allows employers to pay FUTA taxes at 0.6% on the first $7000, which is a savings of approximately $126 per employee for 2016. 390 allowed the state to borrow from state funds providing the state to repay the outstanding Title XII loan. If Ohio had not repaid their outstanding loan, a rate of 1.80% and a potential BCR add-on of an additional 0.30% could have resulted in a rate of 2.2%. Provided the state does not borrow again before November 10, most Ohio employers can expect the FUTA rate of 0.6%. The result of the loan payoff is a significant reduction in the 2016 Federal Unemployment Tax due on January 31, 2017. On August 30 th, 2016, Ohio repaid the Title XII loan to the federal government.
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