DOL Lists 2015 FUTA Credit-Reduction States: Quick Reference Chart Updated

Author: Rena Pirsos, XpertHR Legal Editor

Employers covered by a state's unemployment insurance (UI) program pay federal unemployment (FUTA) tax at a standard rate of 6% on the first $7,000 of wages subject to the tax. In times of high unemployment, states can borrow money from the federal government to continue paying UI benefits to residents and to keep their own UI trust funds solvent.

Each year the US Department of Labor (DOL) identifies states that failed to pay off their loans by the annual November 10 deadline. Three states made the 2015 list. Employers in those states lose the full FUTA credit and, consequently, will owe a greater amount of the tax when they file their 2015 Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return.

The Quick Reference Chart showing the Annual FUTA Credit-Reduction Rates by State has been updated accordingly.