The /Federal Unemployment Tax Act/ (FUTA) surtax expired on July 1. This
temporary surtax of 0.2 percent has been extended eight times since it
was originally enacted in 1976. Employers need to separately track FUTA
taxable wages paid before July 1 at the 6.2 percent tax rate and track
FUTA taxable wages after June 30 at the 6.0 percent tax rate.
Generally, employers can also take a credit against their FUTA tax for
amounts paid into state unemployment funds. An employer is entitled to
the maximum credit if the state Unemployment Program is certified as
conforming and the employer also pays the unemployment tax in a timely
manner. Missouri is a certified state and this credit is as much as 5.4
percent of FUTA taxable wages. This reduces the employer liability to
0.6 percent beginning July 1, 2011.
When a state is in a long-term borrowing situation, as is the case with
Missouri, there is a reduction to the federal unemployment tax credit in
order for the loan principle to be repaid. Missouri has had an
outstanding loan balance for at least two consecutive years, causing a
credit reduction of 0.3 percent. At this time all employers should plan
on a FUTA credit reduction (an increase in your FUTA liability) of 0.3
percent for calendar year 2011.
