Important Notice to Wisconsin Employers:
Reduction in Federal Unemployment Tax Credit
Taxable employers are subject to a federal unemployment tax (FUTA), which is currently 6.0% of the first $7,000 of employee earnings. FUTA allows a 5.4% tax credit for employers in good standing with their state unemployment program, so most employers have a net FUTA rate of 0.6%.
Due to the loan balance of the UI Trust Fund, employers did not qualify for the full FUTA tax credit in 2011, 2012 and 2013. The additional federal tax revenue generated by reductions in the tax credit for those years has been used to pay down the federal loan balance.
All loans have now been re-paid so employers again have the full FUTA tax credit:
- Beginning with 2014 the effective FUTA tax rate returns to 0.6% on the first $7,000 of employee's wages.
Questions can be directed to the IRS Business and Specialty Tax Line at (800) 829-4933.
The above information on FUTA is subject to changes in federal law. UI will update employers annually.