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EMPLOYERS RECEIVE MESC UNEMPLOYMENT INSURANCE TAX CREDIT APPLICATIONS

 DETROIT, Feb. 17 /PRNewswire/ -- Most Michigan employers will be receiving some good news in the mail this week about their state unemployment taxes.
 The Michigan Employment Security Commission (MESC) is mailing tax credit applications to more than 130,000 Michigan employers who may be eligible to claim a credit on their state unemployment taxes.
 MESC Director F. Robert Edwards said the state credit is based on 50 percent of the unemployment penalty taxes employers paid to the Internal Revenue Service (IRS) in 1992 on 1991 payrolls.
 "The credit can amount to as much $28 per employee," Edwards said, "and will appear as a credit on employers' quarterly unemployment tax statements in June 1993. In total, we expect to issue $84 million in credits this year."
 The tax credit is available to employers who have positive balances in their unemployment tax accounts.
 "About 75 percent of all Michigan employers who pay unemployment taxes are positive balance, which means they have paid more in taxes than their employees have received in jobless benefits," Edwards explained.
 Negative balance employers can receive the tax credit but they must first become positive balance by making a voluntary tax payment.
 Employers will have until March 15, 1993, to complete and return to MESC their tax credit application along with any voluntary payments.
 "Michigan is offering the credit to ease the burden on employers of the extra federal unemployment taxes they have had to pay because of the state's debt to the federal government," Edwards explained. "The debt arose from loans taken out in the early 1980s to pay unemployment benefits to hundreds of thousands of jobless Michigan workers."
 The 1992 IRS penalty tax was 0.8 percent on the first $7,000 of each employee's wages, up to $56 per worker.
 "Most employers will also be eligible for a credit of up to $38 per employee next year since they have to pay a 1.1 percent penalty tax this year on 1992 payrolls," Edwards said.
 "However, this is the last year employers will have to pay extra federal unemployment taxes, as the 1993 payment will retire our remaining $213 million federal debt," he concluded.
 Michigan offered unemployment tax credits to employers in 1984, 1985 and 1986.
 Edwards said that employers who do not receive a tax credit application and believe they are eligible should contact MESC's Customer Relations Office at 1-800-638-3994.
 -0- 2/17/93
 /CONTACT: David Plawecki, 313-876-5508, or Norm Isotalo, 313-876-5488, both of MESC/


CO: Michigan Employment Security Commission ST: Michigan IN: SU:

JG -- DE018 -- 7321 02/17/93 12:05 EST
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Date:Feb 17, 1993
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