Expiration of FUTA Surtax on 6/30/11

The Federal Unemployment Tax Act (FUTA) is a tax known to all employers. This tax is imposed on employers on the first $7,000 of wages paid to their employees annually. It historically has comprised of a permanent rate of 6.0% plus a temporary surtax of 0.2% since 1976. This rate is then reduced against state unemployment insurance tax credits up to 5.4%.

The expiration of the surtax means that effective 7/1/2011 the FUTA rate for most employers will be reduced. The new rate for taxable wages paid as of this date will be 0.6% down from the previous 0.8%.

Comments are closed.