21 July 2017 Vermont employers may be due refund for decade-old coding error causing overpayment of SUI interest charges The Vermont Department of Labor announced that a coding error involving the charging of interest for underpaid state unemployment insurance (SUI) contributions was discovered during meetings regarding the modernization of its 30-year old legacy unemployment system. The error resulted in delinquent employers overpaying interest charged to them on their SUI and health care fund assessment contributions. Vermont law requires the Department to charge 1.5% interest per month on unpaid contributions. The rounding error equated to a 0.05% overcharge for the months that contained 31 days. For example, an employer with a past due balance of $1,000 for an entire calendar year may have overpaid $2.50. The Department is working to determine the overpayment amount and automatically issue refunds for each affected employer that it verifies has paid past due balances with interest since 2014. Employers that paid past due amounts with interest prior to 2014 are asked to contact the Department's Employer Assistance Line at +1 877 214 3331 and to have supporting documentation (i.e., past due notices from the Department) of the underpaid taxes and interest charged. This is because the Department only maintains records on employer accounts for three years after the close of the calendar year. Employers that have inactivated their accounts during the last 10 years will also need to contact the Department and provide supporting documentation, as the Department purges the data for inactive accounts on a quarterly basis. The Department warns employers with possible overpayments dating before 2014 (or inactive accounts) that are without supporting documentation may not receive a refund. The Department admits that the coding error could go back to as early as 1987, when it changed its interest rate, but is only able to verify that the error goes back to 2008. The Department cautions that the overpayment calculation is a manual process and will require a large amount of staff time. As a result, it may be some time before affected employers receive their refunds. The statute of limitations on refunds will not be imposed. Vermont employers should carefully review their state unemployment insurance contribution history, in particular, if late payments were made and interest assessed over the last several years. Refunds could be due for years as far back as 1987, but refunds of interest overpayments for years prior to 2014 will not be made without adequate supporting documentation. Document ID: 2017-1192 |
