Indianapolis – Governor Mike Pence today announced that the Department of Workforce Development has paid back the state of Indiana for its advance of roughly $250 million, which was used to eliminate the outstanding federal unemployment loan and the FUTA penalty on employers. The FUTA penalty previously stood as the highest in the country ($126 per employee), or 1.8 percent, and the advance was repaid to the state from the collections of existing state unemployment taxes. The funds used to eliminate the outstanding FUTA penalty will be available for the State to use for other priorities.
“Now that a tax on hiring has been eliminated, Hoosier businesses across the state can use the $126 per employee for critical initiatives, such as hiring new employees, growing existing companies, raising wages, buying new equipment, and more,” said Governor Pence. “As we look ahead, Hoosiers can rest assured that we will continue to maintain our state’s finances with the fiscal responsibility and prudent financial planning that makes these opportunities possible.”
In November, the Governor announced that the Department of Workforce Development had completed the full payoff of the unemployment insurance loan, saving Hoosier businesses $327 million in taxes, which equates to $126 per employee in the state. This payoff of roughly $250 million removed the Federal Unemployment Tax Act (FUTA) penalty facing employers in January 2016.