Basic Payroll: FAQs for 2012 FUTA Credit Reduction States
This article explains how the Federal Unemployment Tax Act (FUTA) credit reduction affects your FUTA taxes, Form 940, and Schedule A for 2012.
For calendar year 2012, 19 states have been identified as credit reduction states: Arizona, Arkansas, California, Connecticut, Delaware, Florida, Georgia, Indiana, Kentucky, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Rhode Island, Vermont, Virgin Islands, and Wisconsin.
You have an active, up-to-date Basic Payroll subscription and version of QuickBooks.
You will know how to complete your tax filings with the FUTA credit reduction for Arizona, Arkansas, California, Connecticut, Delaware, Florida, Georgia, Indiana, Kentucky, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Rhode Island, Vermont, Virgin Islands, and Wisconsin.
To make adjustments as a result of the credit reduction:
Locate your pre-printed 2012 Form 940, Schedule A, and Instructions or click the following links to obtain a blank copy of the forms and instructions.
Manually extract the numbers you need to fill out the form by opening a tax form worksheet in Excel.
- Click Reports on the top menu bar.
- Move your pointer over Employees and Payroll and then again over More Payroll Reports in Excel.
- Select Tax Form Worksheets.
- Select the 940 worksheet and a timeframe.
- Click on Create Report.
- Choose the Reports menu within Payroll Center.
- Select Tax Form Worksheets (or select Tax Form Worksheets directly from the Reports menu, then Payroll Excel Reports).
Fill out your Form 940 and Schedule A. To ensure you complete your forms accurately, review the "Specific Instructions" on page 6 of the Instructions for Form 940, as well as the "Instructions for Schedule A" on page 2 of the Form 940 Schedule A.
Make the necessary payroll liability adjustment in QuickBooks to account for the additional taxes due to credit reduction (see Form 940, line 11, if credit reduction applies):
Attach your Schedule A to your Form 940. File your forms and pay your taxes due as provided in the instructions for Form 940.