Thursday, September 22, 2011

FUTA Tax Rate Changes as of July 1, 2011

We now have one more change to payroll tax rates and procedures that will cost most small businesses more in increased time than any savings they might realize from the decrease in the tax itself.

As of July 1, 2011, the rate for Federal Unemployment will decrease from .8% to .6% - which amounts to a reduction of $ 14. per employee, per year.

However, since the rate is in effect only for those wages paid after July 1, all employees who have already earned up to the $ 7,000 annual maximum will already have been subject to the $ 56. annual tax for 2011.

So, count on having to run extra reports and complete extra lines on the annual Federal Tax Return with likely the same tax that would have been due without the change.