Fiscal Year (FY) 2026 State Workforce Agency Unemployment Insurance (UI) Resource Planning Targets and Guidelines

The U.S. Department of Labor, through its Employment and Training Administration (ETA), has issued Unemployment Insurance Program Letter (UIPL) No. 15-25 to provide state workforce agencies with fiscal year 2026 unemployment insurance resource planning targets and guidelines. This annual allocation is part of the State Unemployment Insurance and Employment Service Operations appropriation, which funds state administration of unemployment insurance programs. The program is built on a model that ties state funding allocations to projected unemployment workloads, ensuring resources are distributed equitably across states to support consistent service delivery to claimants and employers. The total amount of resources requested in the President’s Budget for fiscal year 2026 unemployment insurance base administration is $2,625,444,000. Of this, $2,502,237,000 is designated for base unemployment insurance administration, while $123,207,000 is dedicated to postage costs. These amounts are calculated at an average weekly insured unemployment (AWIU) level of 1.8 million. The planning targets may be revised if Congress appropriates funding levels different from those requested. State-level allocations are derived from multiple data inputs, including minutes per unit (MPU) of workload activity, projected work hours, staffing requirements, and both personal and non-personal service expenditures, as reported in the Resource Justification Model. States may obligate fiscal year 2026 unemployment insurance grant funds through December 31, 2026. Funds used for automation, competitive grants for improved operations, reemployment assessments, improper payment reviews, or training referrals may be obligated through September 30, 2028. States then have an additional 90 days to liquidate obligations, with the option to request extensions through their ETA regional office. The Department of Labor also applies stop-loss and stop-gain rules to minimize abrupt changes in state funding levels, capping annual decreases at 5 percent and corresponding increases at 6.08 percent. Postage allocations are based on each state’s share of total workloads, ensuring proportional support for mailing requirements. The program requires states to submit multiple standardized forms and reports to secure funding. These include the SF-424 application for federal assistance, SF-424A if quarterly claims staffing levels vary, and SF-424B for assurances. In addition, states must file the UI-1 report by October 1, 2025, which details workload activity and staffing assumptions. These documents must be submitted via Grants.gov and the UI Required Reports system, following the instructions provided in the UIPL and its attachments. All expenditures must comply with Section 303(a)(8) of the Social Security Act, the cost principles in 2 C.F.R. Part 200 and 2900, and the annual appropriations act. The funding is flexible within unemployment insurance program categories, allowing states to direct resources where most needed. However, funds earmarked for special projects, supplemental budgets, or specific allocations must be used only for their approved purposes. States are encouraged to plan and budget resources efficiently, ensuring service to claimants and employers is not disrupted. Above-base workload funding is available for states experiencing higher-than-projected claims, with overhead allowances set at 19 percent. The Department also directly funds nationally operated activities such as the National Directory of New Hires and the State Information Data Exchange System. Questions regarding the fiscal year 2026 unemployment insurance planning targets must be directed to the appropriate ETA regional office by September 5, 2025. Full application submissions, including the SF-424 package and the UI-1 report, are due no later than October 1, 2025. Attachments to UIPL 15-25 provide detailed state-level staff allocations, workload assumptions, postage allocations, and submission instructions. These resources collectively guide states in preparing accurate financial and operational plans for the upcoming fiscal year while maintaining compliance with federal law and funding requirements.