US EditionFiscal Fallout: California Interest on Fraudulent COVID Benefits Rapidly Growing
CALIFORNIA, UNITED STATES, JUL 31 – California businesses face federal payroll tax increases from 0.6% to 6% to repay a $20 billion COVID unemployment loan amid ongoing fraud and rising interest costs, officials said.
- In 2025, California businesses face rising federal UI payroll tax surcharges, with payments soon reaching $2 billion annually to repay the $2 billion loan, according to reports.
- A CalMatters investigation found issues with COVID-era unemployment benefits, contributing to about $55 billion in fraudulent payouts from Nigerian scammers to prison inmates.
- Currently, the base federal UI tax is 6% on the first $7,000 of wages, reduced to a small credit, with combined state UI rates set to rise above 5%, pushing employer taxes to 11%.
- Amid rising payroll charges, business leaders warn the surcharges will deter entry-level and part-time hiring, as California’s private-sector job losses reach 173,000 since January 2023.
- Reaching full 6%, the surcharge could hit $4 billion to $5 billion a year, and analysts say the loan will likely stay for at least another decade.
26 Articles
26 Articles
Fiscal Fallout: CA interest on fraudulent COVID benefits growing - Washington Examiner
(The Center Square) – Since California Gov. Gavin Newsom took office in 2019, state debt payments on unemployment benefits have gone from zero to nearly $600 million this year, and could soon result in annual payroll tax increases of nearly $500 per employee, according to an analysis by The Center Square. These payments to the federal government will soon reach $1 billion per year to pay back $20 billion California borrowed to help cover what th…
Fiscal Fallout: California interest on fraudulent COVID benefits rapidly growing
(The Center Square) - Since California Gov. Gavin Newsom took office in 2019, state debt payments on unemployment benefits have gone from zero to nearly $600 million this year, and could soon result in annual payroll tax increases of nearly…
The Killeen Daily Herald
Fiscal Fallout: CA interest on fraudulent COVID benefits rapidly growing
(The Center Square) - Since California Gov. Gavin Newsom took office in 2019, state debt payments on unemployment benefits have gone from zero to nearly $600 million this year, and could soon result in annual payroll tax increases of nearly…
California interest on fraudulent COVID benefits rapidly growing | The Highland County Press
While California Gov. Gavin Newsom has touted the strength of the Golden State’s economy, California’s 5.4% unemployment rate is now tied with Nevada’s for the highest in the nation, putting growing pressure on the state’s UI system.
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