Notice of Approval for South Carolina for Avoidance of 2012 Credit Reduction Under the Federal Unemployment Tax Act

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Sections 3302(c)(2) and 3302(d)(3) of the Federal Unemployment Tax Act (FUTA) provide that employers in a state that has an outstanding balance of advances under Title XII of the Social Security Act at the beginning of January 1 of two or more consecutive years are subject to a reduction in credits otherwise available against the FUTA tax for a calendar year, if a balance of advances remains at the beginning of November 10 of that year. Because the account of South Carolina in the Unemployment Trust Fund had a balance of advances at the beginning of January 1 of 2009, 2010, 2011, and 2012, and still had a balance of advances at the beginning of November 10, 2012, South Carolina employers were potentially liable for a reduction in their FUTA offset credit for 2012. Section 3302(g) of FUTA provides that a state may avoid credit reduction for a year by meeting certain criteria. South Carolina applied for avoidance of the 2012 credit reduction under this section. Pursuant to delegation of authority to me under Secretary's Order 06- 2010, I have determined that South Carolina meets all of the criteria of section 3302(g) and thus qualifies for credit reduction avoidance. Therefore, South