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Pennsylvania Interest Tax Factor for 2011

davem1 posted on September 16, 2011 11:25
Pennsylvania Interest Tax Factor for 2011
 
As it currently stands,  in 2011 every employer’s unemployment compensation tax rate will include the interest factor tax, set at 0.44 percent, and will be assessed on the first $8,000 in wages paid to each employee, this calculates to about $35.20 per employee.
If the Pennsylvania UC Trust Fund is depleted, the Commonwealth can borrow money from the Federal Government to enable it to continue to pay benefits to unemployed workers. The monies borrowed are subject to an annual interest charge. Federal Law prohibits the use of state UC Fund monies to pay the annual interest charge; therefore, a separate contribution (interest factor) was created to generate the necessary revenues to satisfy interest payments on outstanding loans.
The interest factor uniformly applies to all (except those employers subject to newly liable contribution rates) contributory employers and is not subject to appeal. The interest tax factor is identified on the Contribution Rate Notice (Forms UC-657 and UC-657V).
Payments attributable to this interest factor, like employee contributions, are not credited to an employer's reserve account. Such amounts are not credited to the employer's experience record for future rate computation purposes. In addition, the interest factor is not considered to be a "contribution" for federal certification purposes under the provisions of the Federal Unemployment Tax Act.
Posted in: State Taxes
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