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FUTA (Federal Unemployment) Rate Change effective July 1, 2011. The effective tax rate will be reduced from .8% (.008) TO .6% (.006).

Congress has announced that the FUTA .2% surcharge, first enacted in 1977, will not be extended after June 30, 2011. Employers have been required to pay a flat rate of .8% on the first $7,000.00 of each employee’s annual wages for FUTA.

The IRS is currently revising Form 940 (Employer’s Annual Federal Unemployment (FUTA) Tax Return) to accommodate the two different FUTA rates for calendar year 2011.

To read more about this change, view Section 14 in the IRS Employer's Tax Guide.

 

 

 

 

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