FUTA Tax Rate Decreases on July 1, 2011
FUTA (Federal Unemployment Tax) applies to the first $7,000 of gross wages paid to each employee by an employer. The FUTA rate before July 1, 2011, is 0.8%. On July 1, 2011, this rate changes to 0.6%. Remember to use the new rate if you hire a new employee on or after July 1, 2011, or if you have employees who have not reached the $7,000 wage based as of June 30, 2011.
Deposit rules state that if your FUTA tax liability for any calendar quarter is $500 or less, you do not have to deposit the tax. Instead, you may carry it forward and add it to the liability figured in the next quarter to see if you must make a deposit. If your FUTA tax liability for any calendar quarter is over $500 (including any FUTA tax carried forward from an earlier quarter), you must deposit the tax by electronic funds transfer (eftps). Form 940 is used for annual FUTA reporting.
If you have any questions regarding this change or need assistance with your payroll reports, please contact our office at 817.545.1277.