FUTA Tax Decreases 0.02%
It's not much but we take what we can get when it comes to decreased employer payroll taxes. The FUTA Tax is a Federal unemployment tax charged to employers on the first $7,000 of wages paid annually to each employee.
The FUTA tax rate will also be reduced for employers who are entitled to the maximum credit of 5.4%. This reduction applies to employers who pay their state unemployment in full, on time, and on the same wages that are subject to FUTA tax, provided the state is not determined to be a credit reduction state.
Effective July 1, 2011 the following changes will take place:
The FUTA tax rate will decrease to 6.0% from 6.2%
The FUTA tax rate after the maximum credit will decrease to 0.6% from 0.8%
This is a programming nightmare for payroll service bureaus. Although Digit Payroll Corp has successfully implemented the change.
Refer to IRS Publication 15 (2011) for more details.
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