FUTA SURTAX IS NO LONGER IN EFFECT

Beginning July 1,  2011 the 0.2% federal unemployment tax (FUTA) surtax is no longer in effect. Thus, the FUTA tax rate, before consideration of state unemployment tax credits,is now 6.0%

Under code Sec. 3301(1), the .02% FUTA surtax expired on June 30, 2011.  The surtax was part of the 6.2% gross unemployment tax rate that employers paid on the first $7,000 of wages paid annually to each employee (6% permanent tax rate, 0.2% temporary surtax).  The surtax has been in effect in every year since 1976, when it was enacted by Congress on a temporary basis.  Since legislation hasn't been enacted to extend the surtax, the FUTA tax rate, before consideration of state unemployment tax credits, now drops to 6.0%, effective July1, 2011.

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