In 2020, Michigan employers will no longer see an Obligation Assessment (OA) on their tax rate notice thanks to the early payoff of federal bonds issued in 2012.
In 2012, the Unemployment Insurance Agency (UIA), in partnership with the Michigan Department of Treasury, refinanced approximately a $3 billion debt owed to the U.S. Treasury with the issuance of bonds to cover the unprecedented increase in unemployment claims during that time.
“Through employers’ contributions, and the refinancing and elimination of the federal debt, our employers will see a reduction of $65 – $217 per employee in 2020,” said UIA director Steve Gray.
Since 2012, employers have paid an OA with their quarterly taxes. The OA was applied for each rate year until the bonds were paid off. The OA amount varied depending on an employer’s annual tax rate.
Although it was originally expected to take 10 years to satisfy the bonds, the UIA was paid in full ahead of schedule on December 31, 2019. The last quarter in which an employer will have to include the OA with their quarterly taxes is the fourth quarter of 2019 (due January 25, 2020).
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