December 2011: FUTA TAX

As previously mentioned there are several states that have Federal Unemployment Trust Fund loans outstanding. Employers in these states will receive a 0.3% lower tax credit (5.1% versus 5.4% credit) against their Federal Unemployment Tax (FUTA). Some of the states with outstanding loans are Arkansas, Missouri, and Illinois. There is currently a bill introduced in Congress that would eliminate this decrease in credit for employers in these affected states, but there is no indication if this bill will actually be passed. Also, there is a split rate this year due to the 0.2% surtax expiring on July 1, 2011. It is unknown how the IRS will deal with the split year rates. We will keep you informed concerning both of these FUTA issues.