FUTA Credit Reduction



For those of you who are confused about the Federal Unemployment Tax Act, I found a great Wiki-Article.


"Under the provisions of the American Federal Unemployment Tax Act (FUTA), a Federal tax is levied on employers covered by the Unemployment Insurance program at a current rate of 6.0% on wages up to $7,000 a year paid to a worker. The law, however, provides a credit against federal tax liability of up to 5.4% to employers who pay state taxes timely under an approved state UI program. Accordingly, in states meeting the specified requirements, employers pay an effective Federal tax of 0.6%..." Read More

The credit reduction for Nevada and California as of 2012 was at 0.6%. Read More and check out the, "list of FUTA Credit Reduction states for tax year 2009 through 2012."

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