Why It Matters

States are projected to carry $19.77 billion in outstanding federal loans against an unemployment trust fund account balance of $84.69 billion in fiscal 2026, while the Extended Unemployment Compensation Account (EUCA) holds a negative net balance of $4.88 billion, according to a new Congressional Research Service (CRS) report. ​

The report maps projected income, outlays and end-of-year balances for the Unemployment Trust Fund (UTF), a 59-account structure whose complexity, the report says, "presents challenges in tracking the annual flow of UI income and outlays."

Congress has expressed interest in reconsidering how state UI administration funding is collected and distributed through the UTF, and the report describes which flows are set by statute and which require annual appropriations.

The Big Picture

The UTF draws revenue from two sources: the Federal Unemployment Tax Act (FUTA), projected at $7.30 billion in fiscal 2026, and state payroll taxes under the State Unemployment Tax Acts (SUTA), projected at $44.59 billion. Yet FUTA, not SUTA, funds both state and federal UI administration.

Under P.L. 119-75, the Consolidated Appropriations Act, 2026, $3.23 billion was appropriated for state administrative grants and $18 million for federal UI administration.

EUCA's negative net balance reflects two outstanding debts: approximately $4.00 billion owed to the General Fund from Extended Benefits paid during the COVID-19 recession, and $2.49 billion in an inter-account loan from the Federal Unemployment Account (FUA) incurred during the Great Recession. Those liabilities total $6.49 billion against $1.61 billion in projected cash.

FUA's projected end-of-year balance of $13.94 billion sits $34.90 billion below the $48.84 billion ceiling required to trigger a Reed Act distribution to states.

The report notes a contingent threshold for state administration funding: if average weekly insured unemployment exceeds a statutory level, the Department of Labor notifies the Office of Management and Budget; if it does not, Congress must enact supplemental appropriations or states must cover costs themselves.

All fiscal 2026 figures are projections drawn from the Department of Labor's UI Program Outlook: President's Budget 2027, not final results.

The Bottom Line

The projected $3.61 billion Employment Security Administration Account balance exceeds the fiscal 2026 limit of $1.51 billion, and the report projects a $2.10 billion excess transfer into EUCA in fiscal 2027. A Department of Labor final rule on unemployment compensation data availability, published Sept. 16, takes effect Nov. 16.

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