Employers will pay less tax starting July 1
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Employers are currently required to pay federal unemployment taxes pursuant to the Federal Unemployment Tax Act (FUTA). FUTA provides the necessary funding to compensate those who have lost their jobs. As an employer, you are subject to pay FUTA tax on the first $7,000 of each employee’s annual paid wages. Since 1988, the 6.2% FUTA has comprised of two rates: 6.0% permanent rate and 0.2% temporary surtax.
The 0.2% FUTA surtax is set to expire on July 1, 2011 decreasing the FUTA tax rate to 6.0% for the remainder of 2011.
The IRS provides three tests to determine which employers must pay FUTA tax. Click here to access these tests.
To learn more about the FUTA tax please visit the IRS website.
If you have any questions or concerns, please contact me or any Kaufman, Rossin professional.
