Additional FUTA Tax Assessment

Federal law, via IRS Code Sec. 3302 provides for a reduction in the amount of FUTA credit employers may take when a state has outstanding federal loans for two or more years. For the 2013 tax year, there are14 states with outstanding federal loans (by credit reduction, they mean increased taxes).

If your business operates in Delaware, Arkansas, California, Connecticut, Georgia, Kentucky, Missouri, New York, North Carolina, Ohio, Rhode Island, Wisconsin, or Indiana, you will pay higher FUTA payments per employee for the 2013 tax year, resulting in a net increase in your FUTA taxes due. Therefore, similar to last year, you will notice an additional tax due, albeit modest, in January 2014, for the 2013 payrolls.

As a part of the services that Ashgrove Payroll provides to our cleints, we will deduct the additional FUTA amounts due from thier account and file form 940 on their behalf. As the tax year progresses and additional information becomes available, further communications on this topic may be provided.