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Higher FUTA taxes on tap

by on
in Small Business Tax,Small Business Tax Deduction Strategies

The 6.0% tax under the Federal Unemployment Tax Act (FUTA) is offset by a 5.4% credit for an effective rate of 0.6%. But the credit is being reduced for employers in states that haven’t repaid outstanding loans from the feds. Currently, this will result in higher FUTA taxes in over half the states, as follows:

  • A 0.9% reduction of the credit in Indiana and South Carolina
  • A 0.6% reduction of the credit in Alabama, Arkansas, California, Connecticut, Florida, Georgia, Illinois, Kentucky, Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Virginia and Wisconsin
  • A 0.3% reduction in Arizona, Colorado, Delaware, Kansas and Vermont.

The final figures will be announced after Nov. 10.

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