Syracuse (WSYR-TV) -- Many businesses across New York are being hit with an unexpected bill from the Federal government. If you’re a small business it could easily run into the thousands, which is tough to swallow, especially if you’re not expecting it.
"I'm shocked. It just seems irresponsible that the government would hit us with something retroactive in this fashion," said Rick Kier, owner of Pro Scapes, a landscaping company.
The first bill for $13,000 came right in the middle of lawn mowing season. The state forced businesses to help it cover $95 million in interest it racked up with the Federal government. Washington had ended its two year practice of interest free borrowing to help states extend unemployment benefits.
Now, while many of Kier’s trucks have been parked during a mild winter, comes a bill of more than $1,600 from the Federal government. Turns out it took away a tax credit for 2011 because of the borrowing for unemployment benefits.
Kier says what makes this especially difficult is that, unlike a gas station that can change its prices every single day, he can't. He's locked into contracts, so he can't go back retroactively to cover the new costs.
"At least if we were told about it at the beginning of the year we could have budgeted it in," Kier said.
Kier says right he’s preparing 2012 contracts for many clients. As of now, he says he’s not expecting to see the tax credit again, but is hoping for a good surprise that its been added back.
Senator Chuck Schumer has introduced a bill to extend interest-free borrowing through 2012 and waive the interest payments from 2011. It requires states to refund the money. The bill is currently awaiting action in the Senate Finance Committee.
On the web --
More about the Federal Unemployment Tax Credit from the IRS
