FUTA Surtax Expired
The .2% Federal Unemployment Tax (FUTA) surtax expired on June 30, 2011 bringing the FUTA tax rate before state unemployment credits to 6%. FUTA is paid on the first $7,000 of wages paid per year per employee. Now that the surtax has expired employers will be required to separately track FUTA taxable wages before July 1, 2011 and after June 30, 2011 since the FUTA rate is different between the two periods.
The IRS will be revising Form 940, the Employer’s Annual Federal Unemployment Tax Return. There have also been talks in Congress about making the surtax permanent but so far no legislation has been passed.
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