As small business owners complete the second quarter 2021 filing of their state unemployment tax payments with the Ohio Department of Job and Family Services, they should be aware that tax saving benefits have been preserved for the coming years.
On June 29, Gov. Mike DeWine signed House Bill 168, which appropriates $2.2 billion of the $2.7 billion that Ohio is slated to receive this year under the federally funded American Rescue Plan.
For many small business owners, this allocation will have a direct impact on the cost of unemployment tax payments in the coming year, as the allocation will be applied in repayment of the nearly $1.5 billion loan received from the federal government to cover increased unemployment claims paid during the pandemic.
If this loan was not repaid, the federal government would have begun charging interest on the unpaid balance. These interest charges would have resulted in unprecedented increases in employer burdened unemployment taxes of 50 percent, 100 percent and 150 percent in successive years. The Ohio Chamber of Commerce estimates the repayment of the federal loan will save Ohio employers approximately $650 million over the next three years.
“All of this recovery would have been much harder if they would have had to bear the burden of an additional tax on literally hiring people,” said Lt. Gov. John Husted in a prepared statement. “It will help fuel Ohio’s recovery. It will help Ohio employees. It will truly touch every community and every business in the state.”