Congresswoman Tenney Introduces Legislation to Protect Small Businesses from Tax Hikes
Washington, DC – Congresswoman Claudia Tenney (NY-24) today, alongside Congressman Lloyd Smucker (PA-11), introduced the Protecting Small Businesses from Imposed Tax Hikes Act. This bill prevents further unemployment tax hikes for small businesses in states that have failed to repay their outstanding federal Unemployment Insurance (UI) loans.
The Federal Unemployment Tax Act (FUTA) imposes a 6.0 percent gross federal unemployment tax rate on the first $7,000 paid annually by employers to each employee, resulting in a maximum federal tax of $420 per employee per year. Employers in certain states may credit up to 5.4 percentage points of state unemployment taxes paid against the 6.0 percent tax rate, meaning that the typical FUTA tax is $42 per worker per year. However, employers in states whose unemployment insurance funds have outstanding federal advances for two or more consecutive years, like New York, could have their FUTA credit reduced by an additional 0.3 percent for each year the outstanding balance is not repaid in full.
"New York is one of only two states carrying outstanding loans from the unemployment insurance trust fund. Due to Governor Hochul's inaction and financial mismanagement, the burden of repaying these federal UI loans will fall heavily on our state's small businesses. As a former small business owner, I understand firsthand the challenges posed by New York's high taxes and excessive regulations. Small businesses should not be further penalized because of Governor Hochul's irresponsibility. The Protect Small Businesses from Imposed Tax Hikes Act would ensure small businesses and hardworking families do not have to pay for New York's fiscal irresponsibility,” said Congresswoman Tenney.
“Small businesses should not be on the hook to pay for the failures of their state policy makers. States who mismanage their unemployment funds should be responsible for their own debts and should not turn to small businesses to make up the difference. I thank Rep. Tenney for working with me to support the engine of America’s economy—our small businesses,” said Congressman Smucker.
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