On March 31, 2011, Illinois enacted House Bill 1030 to pay interest on the outstanding federal UI loans. As of April 4, 2011 the Illinois Department of Employment Security (IDES) had secured $2.9 billion in outstanding federal loans to shore up the Illinois Unemployment Trust Fund.
This legislation provides for a surcharge to pay for interest due on the federal loans. The surcharge is set at 0.50% of each employer’s taxable wages for the first quarter of 2011. The surcharge does not increase the employer’s overall tax payments for the first quarter of 2011, but rather earmarks a portion (0.50%) of each employer’s tax payment to a new account entitled the Title XII Interest Fund, to be used for interest payments.
While Illinois employers will not see any immediate impact on their 2011 unemployment tax rates or payments, the Illinois Unemployment Trust Fund will be diminished by the transfer of funds to the Title XII Interest Fund. To offset this loss of revenue, House Bill 1030 provides for an increase to the taxable wage base for calendar year 2012 from $12,740 to $13,560.
If the proceeds of the surcharge are insufficient to cover the outstanding interest on the federal loan, the taxable wage base will remain at $13,560 for 2013.
Attached please find a copy Enrolled House Bill 1030.
As always, if there are any questions please do not hesitate to contact us.