New York Businesses See Relief from Unemployment Insurance Surcharges in FY26 Budget

Thanks to Governor Kathy Hochul’s FY26 State Budget, businesses across New York will receive long-overdue financial relief as the state takes major steps to eliminate burdensome unemployment insurance (UI) costs.

In a historic move, the budget includes funding to fully repay New York’s outstanding debt to the Federal Unemployment Insurance Trust Fund (UITF), including the interest accrued during the COVID-19 pandemic. This repayment marks the end of a costly era for employers who have been footing the bill through the annual Interest Assessment Surcharge (IAS).

Why It Matters to Employers

With the UITF debt fully paid off, the New York State Department of Labor (NYSDOL) has confirmed that employers will no longer receive IAS bills starting in 2025.

Now, with the state stepping in to retire this debt, business owners will benefit from more predictable, lower UI costs, allowing them to reinvest in operations, hiring, and growth.

GreenSlate will continue to monitor NYSDOL guidance on UI rate changes and federal tax updates. But for now, New York employers can celebrate a meaningful win!

A Note for GreenSlate Clients

From the beginning, GreenSlate chose not to charge for the IAS cost until the official assessment from New York was received each year due to the variable annual rate and the potential for repayment and no assessment being due. If other payroll providers prematurely billed you for the IAS in the last year, you may be able to recover those funds.

This information in this communication is general in nature, and is not intended, nor should it be construed, as legal, accounting, tax or other professional advice rendered by GreenSlate, LLC. The reader should contact his or her attorney, CPA, or tax professional prior to taking any action based upon this information.