Q:

Whom can you speak with to get advice about a credit reduction state?

A:

Quick Answer

The Internal Revenue Service can be contacted to get advice on a credit reduction state, according to the IRS. The IRS can advise whether a specific state is a credit reduction state.

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Full Answer

A state is identified as a credit reduction state if it has received federal government funds to be used for unemployment benefits payments but has not yet paid back the federal government for the loan for these funds, according to the IRS. Employers in credit reduction states are assessed at a higher federal unemployment tax rate than those in non-credit reduction states, which are taxed at the standard effective rate, as Bloomberg BNA indicates.

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