Overview
Thanks to Governor Hochul, the Unemployment Insurance (UI) Trust Fund loan has officially been paid off. Paying off the debt and making the fund solvent reduces UI costs for businesses. Additionally, the payoff allows the state to increase the maximum UI benefit rate so that it better aligns with other states and changes the taxable wage base to help build up reserves and stabilize the UI Trust Fund for the future.
Frequently Asked Questions
What is the Unemployment Insurance (UI) Trust Fund?
The UI Trust Fund pays unemployment insurance benefits to qualified individuals who are unemployed through no fault of their own, and ready, willing, and able to work. It is funded through employer contributions on an annual, per employee basis.
How is the UI Program impacted by the payoff of the UI Loan?
The payoff: Creates a UI Trust Fund balance that will decrease the 2026 rates so that employers have a more affordable contribution rate.
- Increases the taxable wage base to allow the state to build up reserves and stabilize the UI Trust Fund for the future.
- Increases the maximum benefit rate so that New York UI benefits are on par with other states’ unemployment benefits.
What does the UI Loan payoff mean for New York’s workers?
Since 2020, the maximum benefit amount that an individual could receive when collecting UI was frozen at $504 per week because the UI Trust Fund was in debt. Without State action, maximum benefits would not have increased until 2031. By paying off the UI Trust Fund debt, and restoring the UI Trust Fund to solvency, the state is able to expedite the increase to the maximum benefit rate.
In October of 2025, the maximum benefit rate will increase to $869 per week, putting New York State on par with other states’ unemployment benefits and increasing support for job seekers receiving UI benefits.
The payoff allows the state to build up reserves in the UI Trust Fund, ensuring a safety net for New York’s workers in the future.
What does this mean for New York’s businesses?
Because the Unemployment Insurance Trust Fund debt and associated interest has been paid, businesses across New York will no longer be receiving annual Interest Assessment Surcharge (IAS) bills from the New York State Department of Labor (NYSDOL). .
This puts money back in the pockets of business owners by:
- Eliminating the Interest Assessment Surcharge for 2025 and beyond.
- Decreasing the UI contribution rates in 2026.
- Removing additional federal tax liability related to the loan.
Additionally, the taxable wage base will be increased in 2026 to better align with the increases to the average annual wage. This change will help increase the UI Trust Fund reserves over time – keeping tax rates affordable for New York employers in the future.