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Employers in thirteen (13) states will pay increased Federal Unemployment Tax (FUTA) retroactively for 2013, to repay state unemployment insurance loans due to the Federal Government.
When state unemployment funds are depleted, as occurred in many states in recent years, states draw from a designatedfederal loan account. If such loans are not repaid within two years, employers lose this part of this FUTA tax credit, in effect increasing the FUTA tax rate for wages paid in affected states.
The FUTA tax rate is 0.6% of wages paid, up to $7000, or $42 per employee per year. With this reduction, employers outlined in the states below will have an increase ranging from $21.00 to $63.00 per employee for the tax year 2013.
The IRS has issued the 2013 Form 940, Schedule A, which identifies the states that are subject to FUTA Credit Reduction for 2013. The states that are subject to additional FUTA taxes (“Credit Reduction”) for 2013 are:
Please reference your state on the grid for the Credit Reduction Rate & increase in liability per employee.
|
State |
Reduction Rate |
Increase in liability per employee |
State |
Reduction Rate |
Increase in liability per employee |
|
AK |
0.9% |
$63.00 | MO |
0.9% |
$63.00 |
|
CA |
0.9% |
$63.00 | NY |
0.9% |
$63.00 |
|
CT |
0.9% |
$63.00 | NC |
0.9% |
$63.00 |
|
DE |
0.6% |
$63.00 | OH |
0.9% |
$63.00 |
|
GA |
0.9% |
$63.00 |
RI |
0.9% |
$63.00 |
|
IN |
1.2% |
$63.00 |
WI |
0.9% |
$63.00 |
|
KY |
0.9% |
$63.00 |
