Missouri employers will realize $186 million in tax savings as state repays its unemployment insurance trust fund obligation early
On June 17, Governor Jay Nixon announced that the state has retired its Unemployment Insurance (UI) Trust Fund obligation one year ahead of prior projections, saving Missouri employers $186 million in federal taxes for 2014.
“Our relentless focus on fiscal discipline and economic growth has allowed Missouri to meet its obligation early, saving Missouri employers millions in taxes,” Gov. Nixon said. “Today, businesses are hiring, our economy is growing, and now that we’ve returned our unemployment trust fund to solvency, there is simply no need to inflict additional hardships on those Missourians who have not yet found work.”
During the national recession, expenditures from Missouri’s UI Trust Fund were larger than revenue received from Missouri employers. In 2009, Missouri became one of 36 states that received a loan from the United States Treasury to ensure the Division of Employment Security (DES) could continue to make payments to Missourians who experienced job loss during the Great Recession. Since then, the loan has been repaid in full.
“Missouri’s indebtedness to the UI Trust Fund has been repaid,” said Ryan McKenna, Director of the Missouri Department of Labor and Industrial Relations. “Based on current projections of the fund, we do not anticipate the need for additional borrowing this year, therefore saving Missouri businesses millions of dollars in federal taxes. The Department will continue to work with workers and employers to keep costs for businesses low and move Missouri’s economy forward.”On May 27, 2014, the U.S. Treasury applied the March Federal Unemployment Tax Act (FUTA) payment of $44 million to Missouri’s UI Trust Fund. This payment fully repaid Missouri’s outstanding UI loan. Based on current projections of the fund, no additional borrowing is anticipated. By retiring its obligations early, Missouri businesses will see their FUTA credits restored, saving them $84 per employee in FUTA taxes. Missouri businesses will owe interest on the federal loan for calendar year 2014, which is due September 30.