Change in the Federal Unemployment Tax:Â
By now many of you have received notification from the Indiana Department of Workforce Development regarding the reduction in the federal tax credit and the impact it will have on your Federal Unemployment taxes for 2010 (filed in January 2011). As the notice states, because Indiana has not repaid the trust fund advance within the required two years, the annual credit employers receive for filing on time is reduced. The net effect to you as a business owner is an increase in Federal Unemployment tax of 0.3%, or instead of the maximum FUTA tax being $56 for an employee earning $7,000 or more, it is now $77 (an $11 increase). If we prepare your year end payroll tax returns and forms we will make the appropriate adjustments to the tax due and advise you accordingly.
Note to QuickBooks users: it is imperative that you load the payroll tax updates so that the correct tax rates and tables are used to calculate the payroll for the fourth quarter. Please call our office if you have any questions about how to receive these updates.