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    Standard Payroll, Enhanced Payroll, and Enhanced for Accountants: FAQs for 2013 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 2013.

    For calendar year 2013, 14 states have been identified as credit reduction states:

    State Credit Reduction
    Arkansas 0.9%
    California 0.9%
    Connecticut 0.9%
    Delaware 0.6%
    Georgia 0.9%
    Indiana 1.2%
    Kentucky 0.9%
    Missouri 0.9%
    New York 0.9%
    North Carolina 0.9%
    Ohio 0.9%
    Rhode Island 0.9%
    Virgin Islands 1.2%
    Wisconsin 0.9%
     

    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 21402 on or after December 26, 2013.

    What do I do next?

    1. Process your Form 940 and Schedule A (Form 940) for 2013 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 2013 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.

    6 comments

    Charlotte2/9/2013

    30

    Why doesn't QB accrue this liability instead of waiting until completing 940?

    Reply

    Kriz2/19/2013

    24

    Hi Charlotte,

    I am an Intuit employee and saw your comment. The FUTA credit reduction amount is retroactive to January 1, 2012 and this amount (reported on line 11) is only calculated on the 940 form against the taxable FUTA wage base (amount on line 7). This explains why a manual liability adjustment is needed to record the credit reduction amount in QuickBooks. The article 2012 Federal Unemployment Tax Act (FUTA) Credit Reductions provides more information relating to 2012 FUTA Credit Reductions States for 2012.

    I hope this helps. Thank you for posting a comment!

    Phil2/28/2013

    30

    The explanations above do not address whether form 940 needs to be resubmitted nor how the additional e-payment can be made, including the interest charges.

    Reply

    Kriz3/1/2013

    05

    Hi Phil,

    I aplogize if the explanation above did not provide details on how to correct the Form 940 form that has already been reported. I have updated the article to include the instructions on how to amend the form and pay the tax amount due. I have also added a link to IRS filing instructions for Form 940 in the External Link section above.

    I hope this addresses your concern. We appreciate you posting a comment!

    Susan2/15/2013

    20

    Why didn't Quickbooks automatically figure the credit reduction on the FUTA for 2012? It did for 2011. On the 940 form I printed, Ohio has an X, but no figures listed. I received a notice from the IRS today with the additional charges and an interest charge for not filing on time. I keep my updates current.

    Reply

    Kriz2/22/2013

    117

    Hi Susan,

    I'm from Intuit and saw your comment. There has been similar issues reported by other customers and it was resolved by creating a zero paycheck and downloading the tax table again. I hope this answers your question. Thank you for posting a comment!

    Comments can not be added at this time.

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