According to the Unemployment Insurance Agency of the State of Michigan Department of Energy, Labor & Economic Growth, the FUTA tax credit reduction rate will increase from 0.3% in 2009 to 0.6% in 2010.
Standard Credit Rate is 5.4% for 2010
Generally, employers who pay their state unemployment tax by the due date for filing Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return receive a credit 5.4% against their Federal Unemployment Tax Act (FUTA) tax. This credit is claimed on Form 940.
FUTA Wage Base is $7,000 for 2010
Since the FUTA wage base is $7,000 for 2010, a maximum tax of $56 per employee is due, calculated as follows:
Employers in Certain States Are Subject To Credit Reduction
Michigan Is Subject To Credit Reduction for Second Consecutive Year
Since Michigan was already subject to a credit reduction in 2009 of 0.3%, the credit reduction will increase to 0.6% for 2010. The credit reduction will continue to increase by 0.3 percentage points each year until the loan is paid, e.g., 0.9% in 2011, 1.2% in 2012, etc.
Vision Payroll Will Calculate the Credit Reduction for All Michigan Clients
Contact Vision Payroll if you have any further questions on the Michigan credit reduction.