Senate Bill To Extend US Unemployment Tax

by Leroy Baker, Tax-News.com, New York

13 October 2009

Legislation has been introduced in the United States Senate that would extend a federal unemployment tax in order to prolong payments of unemployment insurance for jobless workers in all 50 states.

The legislation was introduced by Senate Majority Leader Harry Reid (D-NV), Senate Finance Committee Chairman Max Baucus (D-Mont.), and Senators Jack Reed (D-RI) and Jeanne Shaheen (D-NH) and would extend unemployment insurance by up to 14 additional weeks. The legislation would also extend benefits for six additional weeks in states with unemployment levels over 8.5%.

The provisions would be paid for by amendments to the Internal Revenue Code to extend from 2009 through 2010 the 6.2% surtax on employers under the Federal Unemployment Tax Act. The bill also delays the scheduled 2010 reduction in the surtax to 6% until June 30, 2011.

According to the Senators, nearly two million out-of-work Americans face expiring benefits by the end of this year.

“This agreement recognizes the need to extend unemployment benefits for workers in every state whose unemployment benefits have run out or will do so in the next several weeks," said Reid.

“As of last month, 15 million unemployed Americans were competing for three million available jobs," added Baucus. "Too many Americans are unemployed right now, and states are struggling to pick up the slack. Today is an important step in the right direction to offer support to our unemployed."

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