Iowa Gov. Kim Reynolds on Thursday directed $490 million from federal CARES Act money to Iowa’s unemployment trust fund.
The move prevents the state from running out of funds for unemployed Iowans and saves Iowa employers from higher charges, according to Beth Townsend, director of Iowa Workforce Development.
She said it’s likely to save companies $400 million in taxes in 2021.
“As we move forward with recovery, I want to minimize the pandemic’s impact on employers so they can focus on growing and reinvesting in Iowa,” Reynolds said in a statement.
“Iowa’s employers continue to do an outstanding job during these unprecedented times, and today’s action will provide them greater certainty.”
Iowa Workforce Development normally would charge employers for part of the unemployment claims being paid their laid-off workers during the coronavirus pandemic.
But Townsend said Iowa Workforce Development suspended that practice at the beginning of the pandemic to avoid increasing tax rates.
The fund had a balance of $1.25 billion in 2019, according to an Iowa Workforce Development report, but the pandemic has resulted in a surge in unemployment claims.
More than 150,000 Iowans were collecting jobless benefits in June.
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