Federal Tax RateįUTA taxes are calculated by multiplying 6.0% times the employer's taxable wages. The new forms have been updated to include the latest information for states with credit reductions for FUTA year 2012. Click here for IRS forms 940 () and 940 Schedule A () for FUTA year 2012 Federal Unemployment Taxes. In addition, FUTA pays one-half of the cost of extended unemployment benefits (during periods of high unemployment) and provides for a fund from which states may borrow, if necessary, to pay benefits.

FUTA covers the costs of administering the UI and Job Service programs in all states. Employers pay this tax annually by filing IRS Form 940. The Federal Unemployment Tax Act (FUTA), authorizes the Internal Revenue Service(IRS) to collect a Federal employer tax used to fund state workforce agencies. However, some state laws differ from the Federal law and employers should contact their state workforce agencies to learn the exact requirements. Generally, employers must pay both state and Federal unemployment taxes if: (1) they pay wages to employees totaling $1,500, or more, in any quarter of a calendar year or, (2) they had at least one employee during any day of a week during 20 weeks in a calendar year, regardless of whether or not the weeks were consecutive. Unemployment Insurance (UI) is a federal-state program jointly financed through Federal and state employer payroll taxes (federal/state UI tax). Unemployment Insurance Tax Topic Unemployment Insurance Taxes

Mass unemployment tax break