In January of 2025, the US Department of Labor released its notice of potential FUTA offset credit reductions for 2025.
California, Connecticut, New York and the Virgin Islands had potential FUTA offset credit reductions for 2025 and interest on loans to be paid. California, Connecticut and New York also were shown as at risk of a Benefit Cost Rate Additional FUTA offset credit reduction.
Since January we have been working with state workforce agencies and business associations to convince states to repay remaining loan amounts, eliminate FUTA offset credit reductions, request waiver of the BCR Add On Offset Reduction, and pay off interest. We understand that a request for waiver of additional FUTA offset credits due to the Benefit Cost Rate (BCR) was filed by California before the July 1, 2025 deadline.
New York has repaid the outstanding Title XII loan amount, and we expect that New York will not need to request a loan until after the November 10th deadline. New York is also preparing to pay the accrued interest by September 30th to avoid an assessment on employer payroll that was previously imposed for 2024.
Connecticut has paid off the Title XII loan balance in 2023 and 2024. Although there is a small outstanding loan amount, Connecticut should be in a position to pay the outstanding interest by the September 30th due date and to pay the remaining loan balance by November 10th.
We are tracking the interest repayments due by September 30th and outstanding loan amounts and payments. Unless something changes before November 10th, we expect that the only states with remaining increases in the net FUTA rate for 2025 will be California and the Virgin Islands. We should also have a decision from US DOL with respect to the application of the BCR additional offset credit for employers in California after September 30th.
The status of outstanding loan amounts and interest due as of July 14th was posted on line at this link.
