Wednesday, November 29, 2017

California, Virgin Islands Face FUTA Credit Reduction for 2017


According to the U.S. Department of Labor (DOL), California and the U.S. Virgin Islands could not pay their federal loans by the November 10, 2017, deadline and will lose the full 2017 Federal Unemployment Tax Act (FUTA) credit. Each will incur a credit reduction of 2.1% for 2017 [DOL, 2017 Federal Unemployment Tax Act (FUTA) Credit Reductions].

Federal Form 940, Schedule A Will Reflect Reductions
The additional FUTA tax must be deposited by the due date of the 2017 federal Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, which is January 31, 2018. The 2017 Schedule A (Form 940) will contain the official list of credit reduction states, and the credit reduction total from Schedule A is reported on Form 940. Both forms will be available on the IRS website when they are finalized.

Check back with Pay News Now as we continue to monitor updates regarding FUTA Credit Reductions.