The state of Ohio is enacting legislation which will allow for the use of state funds to pay off the remaining balance of their outstanding Title XII loan. It is anticipated that Governor Kasich will sign the legislation. The remaining federal debt is estimated at $250 million and would be paid in September from the state’s unclaimed funds account. This would ultimately be charged back to employers by way of a surcharge in 2017. However, the surcharge should be a significantly smaller expense than the FUTA tax that Ohio employers have been subject to as a result of the outstanding federal loan. With the Title XII loan paid off, FUTA taxes for Ohio employers will be reduced to the normal $42 per employee instead of the $168 per employee that would be due if the Title XII loan were not paid off. This will be a welcome relief for Ohio employers and will allow the state to begin rebuilding a positive balance in their UI trust fund.
California and the Virgin Islands are now the only jurisdictions that still owe on Title XII loans.