We want to provide all Florida clients with an update regarding the special interest assessment that was recently mailed by the Florida Department of Revenue. As you may recall, the Florida UI trust fund currently has an outstanding loan from the federal government in excess of $2 billion to pay UI benefits. Since the loan will not be repaid by January 1, 2012, the state is required to pay interest on the borrowed funds unless federal law changes.
On January 22, 2011, the Department mailed an assessment notice (Form UCT-27Fi) to each taxable employer informing them of their proportionate share of the interest. Since then, President Obama’s federal budget proposal for fiscal year 2012 has been announced. Included in this proposal is a provision that would suspend interest payments for UI loans for calendar years 2011 and 2012. If this provision is adopted, any payments made to the Florida Department of Revenue in relation to the special interest assessment will be unnecessary and will be considered overpayments.
Many Florida employers have already paid the assessment they received last month, or are getting ready to pay it. We have been advised by a representative of the Department that payments collected from an employer prior to the suspension of the interest at the federal level (if the interest suspension becomes law), will be credited to the employer’s state unemployment account. The Department will then use the credit to satisfy any and all outstanding balances due on the account. At that point, the remaining credit will be available either for refund or to be used to offset future UI tax due.
Please note that payment of the Florida special interest assessment is not due until June 30, 2011. As of today the assessment is still valid and payable, and will remain so unless the federal proposal is enacted.
As always, if there are any questions please do not hesitate to contact us.