California Employers will owe additional FUTA Tax for 2017

For the 7th consecutive year, California Employers will be assessed additional federal unemployment taxes (FUTA) because the state failed to repay the outstanding loan balance to the federal government by the November 10th deadline. https://www.irs.gov/businesses/small-businesses-self-employed/futa-credit-reduction

California Employers subject to FUTA, will pay an additional 2.1% on FUTA taxable wages (first $7000 of taxable wages times 2.1% or up to $147 per employee). Payality will provide a copy of the annual 940 Schedule A as early as possible in January so that clients can review the form to know the additional FUTA tax owed. Payality will collect the additional FUTA tax owed from full tax service clients on January 23, 2018 in order to remit the payment to the IRS when due.