You are here: HomeTaxes & ComplianceOhio Employers to Pay Extra FUTA Taxes on the 4th Qtr. 2014 FEDERAL FORM 940

 

***IMPORTANT INFORMATION AFFECTING YOUR BUSINESS CASH-FLOW***

OHIO EMPLOYERS TO PAY EXTRA FUTA TAXES ON
THE 4TH QTR. 2015 FEDERAL FORM 940

 

The Department of Labor recently announced the FUTA credit reduction states which included Ohio. Ohio’s FUTA credit has been reduced by 1.5% retroactive for the entire year 2015, increasing the FUTA rate for Ohio employers from 0.6% to 2.1% on the first $7,000 of employee wages. This is an increase from $42 per employee to $147 per employee earning $7,000 or more. We will inform you at the beginning of January of your additional liability and pull funds via ACH around January 21st.

 

Under the joint federal/state unemployment insurance system, states with a high rate of unemployment and difficulty meeting their benefit obligations can borrow money from the FUTA Account to pay benefits. If a state has outstanding loan balances on January 1 for two consecutive years, and does not repay the full amount of its loans by November 10 of the second year, the FUTA credit rate for employers in that state will be reduced until the loan is repaid, with the extra FUTA taxes paid being applied against the state’s outstanding loan balance. Each year the loan remains unpaid, the credit reduction increases by 0.3%; this is Ohio’s fifth year with a loan balance unpaid. The FUTA credit-reduction tax liability is due in January.

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