2012 Federal Unemployment Tax Act (FUTA) Credit Reductions
This article provides information relating to 2012 FUTA Credit Reduction States for 2012.
If a state is identified as a credit reduction state, employers that pay wages that are subject to the state's unemployment tax laws must pay additional federal unemployment tax when filing their Form 940 and Schedule A (Form 940) for 2012 due in January of 2013.
You are interested in information relating to FUTA Credit Reduction States for 2012.
Federal Tax Rate
Employers who pay the state unemployment tax on a timely basis may be eligible to receive an offset credit of 5.4%. Therefore, the net FUTA tax rate for wages paid in calendar year 2012 is generally 0.6% (6.0% - 5.4%) for a maximum FUTA tax of $42.00 per employee, per year (0.6% x $7,000 = $42.00).
Federal Credit Reduction
The Federal government has identified as many as 19 states on its websites that are facing FUTA credit reductions. Information about the credit reduction states can be found at the following sites:
The table below lists the 19 credit reduction states for 2012.
Form 940 and Schedule A (Form 940) for 2012
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