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    Standard Payroll, Enhanced Payroll, and Enhanced for Accountants: FAQs for 2014 FUTA Credit Reduction States

    Article ID: 1000921

    Overview

    This article explains how the Federal Unemployment Tax Act (FUTA) credit reduction affects your FUTA taxes, Form 940, and Schedule A for 2014.

    For calendar year 2014, 8 states have been identified as credit reduction states:

    State Credit Reduction
    California 1.2%
    Connecticut 1.7%
    Indiana 1.5%
    Kentucky 1.2%
    New York 1.2%
    North Carolina 1.2%
    Ohio 1.2%
    Virgin Islands
    1.2%
     

    Assumptions

    You have an active QuickBooks payroll subscription and a supported version of QuickBooks.

    Details

    Frequently Asked Questions

    What do I need to do?

    Download Payroll Update 21502 on or after December 29, 2014.

    What do I do next?

    1. Process your Form 940 and Schedule A (Form 940) for 2014 in QuickBooks.
    2. Make the necessary payroll liability adjustments in QuickBooks to account for the additional taxes due to credit reduction: see Form 940, Line 11, if credit reduction applies, enter the total from Schedule A (Form 940).
    3. Adjusting payroll liabilities
    4. Attach your Schedule A to your Form 940 and file your forms and pay your taxes due as provided in the instructions for Form 940.


    You may also use the E-file and Pay feature to file and pay your Form 940 and Schedule A (Form 940).


    What do I do if I have already submitted the 940 Form but the credit reduction was not reported?

    1. Process your Form 940 for 2014 in QuickBooks.
    2. Check the amended box in the top right corner of Form 940, page 1, box a.
    3. Take note of the credit reduction amount reported in Line 11. If the amount is zero, download the latest tax table version.
    4. Print and sign the form. (Paper return are used to amend a Form 940 that was e-filed.)
    5. Attach an explanation of why you are amending your return. For example, you are amending your return to report the credit reduction amount.
    6. Enter a liability adjustment to record the credit reduction amount in QuickBooks.
    7. Attach your Schedule A to your Form 940 and file your forms and pay the amount due. (File the amended return using the Without a payment address (even if a payment is included) under Where Do You File.

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