NYS Department of Labor unemployment funding - which tax provides federal funding for unemployment insurance?
I'm trying to understand how unemployment benefits are actually funded in New York. I know there's some federal component to the funding, but I can't figure out which specific tax covers this. Is it the FUTA tax that employers pay? I'm asking because I'm dealing with an interstate claim situation and the NYS Department of Labor rep mentioned something about federal coordination but wasn't clear on the funding mechanism. Does anyone know the specifics of how this works?
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Dana Doyle
Yes, it's the Federal Unemployment Tax Act (FUTA) that provides the federal funding portion. Employers pay FUTA tax which creates a fund that helps states during high unemployment periods and funds the administrative costs of state unemployment programs like NYS Department of Labor. The current FUTA rate is 6% on the first $7,000 of each employee's wages, but employers can get a credit for state unemployment taxes they pay, reducing it to typically 0.6%.
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Darcy Moore
•That makes sense! So the federal government basically backstops the state system through FUTA collections. Thanks for the clear explanation.
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Liam Duke
wait i thought unemployment was just paid by employers to the state? didnt know there was federal money involved too
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Dana Doyle
•There are actually multiple funding sources. Employers pay state unemployment taxes (SUTA) which fund your regular weekly benefits. FUTA helps with administrative costs and provides emergency funding during economic downturns. For NYS Department of Labor specifically, most of your weekly benefits come from the state fund, but federal money helps keep the system running.
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Manny Lark
I had no idea about this when I was filing my claim last year. The whole funding structure is pretty complex. Makes me wonder how they determine when federal emergency funding kicks in for states.
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Rita Jacobs
If you're dealing with interstate issues, you might need to talk directly to someone at NYS Department of Labor to understand how the federal coordination affects your specific claim. I had a similar situation and couldn't get clear answers from the automated system. I ended up using claimyr.com to actually reach a real person - they have a service that gets you through to agents without waiting on hold forever. There's a demo video at https://youtu.be/qyftW-mnTNI that shows how it works. Really helped me get the specifics sorted out.
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Darcy Moore
•That's actually really helpful - I've been trying to call NYS Department of Labor for days about my interstate situation. Will definitely check that out.
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