--- title: Three States, Virgin Islands May Face Credit Reduction for 2024 description: "U.S. Department of Labor released list of potential FUTA credit reduction states for 2024: California, Connecticut, New York, and the Virgin Islands." image: https://www.payroll.org/images/default-source/default-album/untitled-design-%285%29.png?sfvrsn=625e6306_0 --- [![soc-fb](https://blogs.payroll.org/hubfs/ct-23-assets/footer-icon_fb.svg "soc-fb")](https://www.facebook.com/American-Payroll-Associations-Chapter-Relations-877434285724525/) [![soc-in](https://blogs.payroll.org/hubfs/ct-23-assets/footer-icon_li.svg "soc-in")](http://www.linkedin.com/groups?about=&gid=1051077&trk=anet_ug_grppro) [![soc-tw](https://blogs.payroll.org/hubfs/ct-23-assets/footer-icon_tw.svg "soc-tw")](https://twitter.com/APAChapters?lang=en) - [Home](https://blogs.payroll.org/chapter-leaders) - [About](https://blogs.payroll.org/about) - [Connect](https://blogs.payroll.org/connect) - [Resources](https://blogs.payroll.org/resources) ![23-PayNewsNow-Horiz-Logo](https://blogs.payroll.org/hs-fs/hubfs/23-PayNewsNow-Horiz-Logo.png?width=1300&name=23-PayNewsNow-Horiz-Logo.png "23-PayNewsNow-Horiz-Logo") [![26 PayrollOrg®RGB-NoTag long](https://blogs.payroll.org/hs-fs/hubfs/26%20PayrollOrg%C2%AERGB-NoTag%20long.jpg?width=1300&name=26%20PayrollOrg%C2%AERGB-NoTag%20long.jpg "26 PayrollOrg®RGB-NoTag long")](https://payroll.org/) Custom URL No Widget: By [Lia Coniglio, Esq.](https://blogs.payroll.org/pay-news-now/author/lia-coniglio-esq) on Jan 26, 2024 11:52:23 AM # Three States, Virgin Islands May Face Credit Reduction for 2024 The U.S. Department of Labor (DOL) released its list of potential FUTA credit reduction states for 2024 \[DOL, [***Potential 2023 Federal Unemployment Tax Act (FUTA) Credit Reductions***](https://oui.doleta.gov/unemploy/futa_credit.asp), 1-2-24\]. California, Connecticut, New York, and the Virgin Islands face a potential credit reduction for 2024. The determination will be made after November 10, 2024. If states have an outstanding Federal Unemployment Account (FUA) loan on January 1 of at least two consecutive years *and* on November 10 of the second year, they are subject to a credit reduction on their Federal Unemployment Tax rate until the loan has been paid off. Each consecutive year a state has an outstanding loan balance on January 1, the credit reduction increases by 0.3%, though states that have made an effort to keep their balances in check have some opportunities to avoid the reduction. ### Potential Credit Reductions for 2024 California and New York have a credit reduction of 0.6% for 2023 and may have a credit reduction of 0.9% for 2024. Connecticut paid off its outstanding loan balance by the November 10, 2023, deadline and was not subject to a credit reduction for 2023. However, Connecticut resumed borrowing and had an outstanding loan balance on January 1, 2024. Because it had outstanding loans on three consecutive January 1 (in 2022, 2023, and 2024), it is subject to a potential credit reduction of 0.9% for 2024. If Connecticut pays off its loan by November 10, 2024, it will not be subject to a credit reduction for 2024. The Virgin Islands began borrowing in August 2009, has a current outstanding loan balance of $87,510,622.10, and might be subject to a credit reduction of 5% for 2024. Interested in more state and local payroll coverage? PayrollOrg’s [***PayState Update***](https://ebiz.payroll.org/ebusiness/ProductCatalog/Product.aspx?ID=19) eNewsletter is perfect for you. --- *Lia Coniglio, Esq., is Managing Editor of* PayState Update *and Senior Manager of State Payroll Information Resources for PayrollOrg.       *                  ### Search ![payroll-logo-white](https://blogs.payroll.org/hs-fs/hubfs/payroll-logo-white.png?width=200&name=payroll-logo-white.png "payroll-logo-white") [Privacy Policy](http://www.americanpayroll.org/privacy/)     |     Acceptable Use ©[PayrollOrg](http://payroll.org) [![soc-fb](https://blogs.payroll.org/hubfs/ct-23-assets/footer-icon_fb.svg "soc-fb")](https://www.facebook.com/PayrollOrg) [![soc-in](https://blogs.payroll.org/hubfs/ct-23-assets/footer-icon_li.svg "soc-in")](https://www.linkedin.com/company/payroll-org/mycompany/) [![Twitter-X-White-Logo-PNG](https://blogs.payroll.org/hs-fs/hubfs/Twitter-X-White-Logo-PNG.png?width=20&height=19&name=Twitter-X-White-Logo-PNG.png)](https://twitter.com/PayNews)