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What is the FUTA tax credit?

April 26, 2017FUTA tax credit

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What is the FUTA tax credit?

1 Answer

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Employers are required to submit annual Federal Unemployment Tax Act (FUTA) tax payments in addition to their quarterly state unemployment insurance (UI) tax payments. The FUTA tax rate is 6.2%, but under normal conditions employers who pay their state UI taxes in a timely manner receive a credit of up to 5.4% toward their FUTA taxes. Therfore, their net FUTA tax rate is 0.8%. For additional information, see our brochure IA318.10 – Relationship of NYS and Federal UI Tax Reporting on our web site under “Doing Business in NY” or pick up a copy at any of our offices.