∙ Federal Unemployment Tax Act (FUTA) Payments Continue to Increase

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”In addition to paying interest costs associated with outstanding loans, Connecticut’s employers made mandatory payments in January 2012 into the FUTA system to pay down the principal on our outstanding loan balance. These additional payments, referred to as a ‘credit reduction,’ were at the rate of 0.3%; a maximum $21 for each employee based on the FUTA taxable wage base of $7,000 per employee. Nineteen other states along with Connecticut were subject to credit reductions for 2011 wages. ”Because the state is not in a position to pay its outstanding loan in full this year, a credit reduction in the amount of 0.6% will be applied to wages paid in 2012. The additional FUTA credit reduction, a maximum of $42 per employee, will be due in January 2013. ”Because the FUTA tax was reduced as of July 1, 2011 to an effective rate of 0.6%, the total rate for Connecticut wages paid in 2012 will be 1.2%. While you may wish to accrue funds at this level, federal deposit rules require only the FUTA tax, and not the credit reduction, to be included in your deposit calculations for April, July and October. The entire credit reduction for the year, plus any remaining un]deposited FUTA tax, must be deposited or paid by January 31, 2013.” Source: CTDOL

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