The temporary waiver of interest on state unemployment trust fund loans provided in Section 4103 in the Families First Coronavirus Response Act is ending September 6, 2021, leaving states with remaining loan balances responsible to pay daily interest through September 30, 2021.

As of September 2, 2021 the states with outstanding loan balances included CA, CO, IL, MN, NJ. NY, OH, PA, TX, and VI. See Government – Title XII Advance Activities Schedule (

Some states have taken measures to reduce or eliminate balances due on loans. New York requested a partial deferral of interest that was recently approved by US DOL. 2021-19176.pdf (

Interest payment is due on September 30, 2021 as a condition of meeting federal conformity and compliance under 26 USC 3304 (a) (17) of the Internal Revenue Code and Section 303 (c) (3) of the Social Security Act. State unemployment contributions may not be used as the source of payment. The interest rate for 2021 is 2.27770000%

States have planned to assure payment through state general funds, transfers of amounts from other state accounts, and the imposition of state assessments to be paid by employers. The amounts to be paid in interest for the 24 days from September 7, 2021 through September 30 may be manageable within state budgets, but states with continued outstanding loans should plan for the significant amounts due as of September 30, 2022 if they are not able to pay off the outstanding loan balances.

Some states may be able to take advantage of so called “cash flow” loans under which interest is not applied to the outstanding loan amount,  but it may be difficult to meet the USDOL funding goal requirements. There are other relief provisions that should also be reviewed.

May/September Delay                                         20 CFR 606.40

High Insured Unemployment Rate Deferral    20 CFR 606.41

High Total Unemployment Rate Delay             20 CFR 606.42

States and employers should assure that the interest payments are made by September 30, 2021 to avoid a failure to meet federal conformity and compliance requirements.