California Is a Credit Reduction State for 2011

According to the California Employment Development Department, California will be a FUTA tax credit reduction state in 2011. Standard Credit Rates Is 5.4% for 2011 Generally, employers who pay their state unemployment tax by the due date for filing Form 940,...

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Michigan Offers Rebate for Expected Credit Reduction

According to the Unemployment Insurance Agency (UIA) of the State of Michigan Department of Licensing and Regulatory Affairs in Fact Sheet 139, the FUTA tax credit reduction rate will increase from 0.6% in 2010 to 0.9% in 2011. Since the determination will not be made...

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Tip of the Week: FUTA Tax to Decrease This Friday

Most employers nationwide will receive an employment tax reduction July 1, 2011 when the temporary FUTA surtax expires. The temporary surtax was enacted in 1976. The standard FUTA tax rate will decrease from 6.2% to 6.0%. Standard Credit Rate is 5.4% for 2011...

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Connecticut Imposes Special Assessment on Employers

In Connecticut, the average number of workers filing for Unemployment Insurance (UI) benefits since 2007 has grown from 40,000 to approximately 130,000. In 2009 and 2010, UI benefit payouts greatly exceeded UI tax revenues. In 2011, UI benefit payouts will continue to...

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Question of the Week: What Is a Taxable Wage Base?

This week’s question comes from April, an office manager. I’ve read that the taxable wage base has increased in New Hampshire for 2011, but I’m not sure of the impact. What is a taxable wage base? Answer: The taxable wage base is the amount of income that will be...

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Indiana Is a Credit Reduction State for 2010

According to the Indiana Department of Workforce Development, Indiana will be a FUTA tax credit reduction state 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...

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Michigan FUTA Tax Credit Reduction to Increase for 2010

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...

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Question of the Week: What is a Credit Reduction State?

This week’s question comes from Scott, a small-business owner. I own a business in Michigan. I’ve heard that for 2009, Michigan is a credit reduction state. What is a credit reduction state? Answer: For 2009, Michigan is the only “credit reduction state”. This means...

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Question of the Week: Why Did My Payroll Cost Increase?

This week’s question comes from Rachel, a business owner. I have been running payroll with almost the exact same hours every week for the last few months. In the last few weeks, the payroll cost was several thousand dollars more each week than a month ago. Why did my...

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IRS Issues Fact Sheet on S Corporation Officer Compensation

The Internal Revenue Service (IRS) recently issued Fact Sheet FS-2008-25, which discusses S corporation officer compensation. Corporate officers, whether in S corporations or C corporations, are generally considered employees of the corporation. Officers who perform...

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FUTA Surtax Extended Again

The Federal Unemployment Tax Act (FUTA) is imposed by §3301 of the Internal Revenue Code of 1986 (IRC). The statutory rate of 6.2% was set to revert at the end of 2008 to the original rate of 6.0%. Under §404 of the Emergency Economic Stabilization Act (Public Law...

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Question of the Week: Can I Pay My Husband Through Payroll?

This week’s question comes from Denise, a sole proprietor. I just hired my husband to work for me in my business. I’m a sole proprietor. Can I pay my husband through payroll? Answer: If your husband (or wife) is a bona fide employee of you in your trade or business,...

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