JULY 2025 UPDATE

NEW YORK – FUTA Update and Interest Assessment Surcharge(IAS)

The state of New York announced that due to the recent passing of the Fiscal Year 2026 State Budget, they will be able to pay back all Federal Loans taken as a result of the Covid-19 Pandemic.

After the payment has been made, Employers in the state of New York should no longer be subject to the Federal Unemployment Tax Increase(1.20%) for 2025 nor will the state be issuing Interest Assessment Surcharge to employers this year.

In addition, tax rates for 2026 are expected to be lower since the state will no longer be using the “maximum” rate schedule as a result of paying off the Federal Loans.

The deadline for paying off the Federal Loan to avoid the FUTA increase is November 2025. ValeU Group will be monitoring the situation and will update our clients should anything change.

FUTA UPDATE – 2025

California currently has an outstanding FUTA Title XII Loans for 2025 and should they fail to pay back the loans by November of 2025, employers will have to pay an additional 1.20% on employees reported in CA retroactively to January 1, 2025.

1.    Employers have until January 31, 2026 to pay the additional 1.20% on employees in CA.

2.    The Additional 1.20% results in an estimated increase of $84 per employee for 2025 (1.20% * $7,000 FUTA Wage Base).

Total FUTA Rate will be 1.80% in CA for 2025. Virgin Islands would be 5.10%