US DOL Releases FUTA Tax Rates for 2014

The US Department of Labor, Employment and Training Administration, Office of Unemployment Insurance today posted the results of its review of state unemployment trust fund loan status. Below is the report showing FUTA Tax Rates for 2014. See posting at: http://oui.doleta.gov/unemploy/finance.asp

States with increased FUTA tax rates include:

California: 1.8%
Connecticut: 2.3%
Indiana: 2.1%
Kentucky: 1.8%
New York: 1.8%
North Carolina: 1.8%
Ohio: 1.8%
Virgin Islands: 1.8%

All other state and jurisdiction rates will be set at the base 0.6% rate (all on the $7,000 taxable rate base).

FUTA taxes for 2014 are to be finally paid by January 31, 2015th. See detail below.

States with 2014 Federal Unemployment Tax Act (FUTA) Credit Reductions

FUTA sections 3302(c)(2) and 3302(d)(3) provide that employers in states that have an outstanding balance of advances under Title XII of the Social Security Act at the beginning of January 1 of two or more consecutive years are subject to a reduction in credits otherwise available against the FUTA tax, if all advances are not repaid before November 10 of the taxable year. These credit reductions are made from the regular credit of 5.4%. So, while employers in states without a credit reduction  will have a FUTA tax rate of .6% (on the first $7,000 of wages paid) for the year, employers in states with a further credit reduction due to an outstanding balance of advances will incur a FUTA tax rate of  .6% + FUTA credit reduction.

In addition states passing their fifth consecutive January 1 with an outstanding advance may be subject to an additional credit reduction under FUTA 3302(c)(2)(C) (BCR Add-on). A waiver of this add-on is provided under 20 CFR 606.25 for statesthat meet the specified criterion.

For 2014 fifteen states and one jurisdiction faced a potential FUTA credit reduction. Seven of those states repaid their outstanding advances before Nov. 10th thereby eliminating any FUTA credit reduction. Six states and one jurisdiction had an outstanding balance of advances on January 1 in each of the years of 2010 through 2014, and did not repay all advances before November 10, 2014 – these states face a 1.2% credit reduction. Two states had an outstanding balance of advances on January 1 in each of the years of 2009 through 2014, did not repay all advances before November 10, 2014, these states face a 1.5% credit reduction.

Ten states and one jurisdiction applied for a waiver of the fifth year (BCR)add-on and all them were found eligible for the waiver. One state had a fifth year (BCR) add-on to their credit reduction. One state applied for and was found eligible for avoidance of their 2014 FUTA credit reduction:

State Final 2014 FUTACredit Reduction Repaid OutstandingTitle XII Advance-2014 2014 BCR add-on Eligible for BCR  Add-on Waiver Eligible for Avoidance Final 2014FUTA Tax Rate
Alabama 0.6%
Alaska 0.6%
Arizona 0.6%
Arkansas X 0.6%
California 1.2% X 1.8%
Colorado 0.6%
Connecticut 1.7%   0.5% 2.3%
Delaware X 0.6%
District of Columbia 0.6%
Florida 0.6%
Georgia X 0.6%
Hawaii 0.6%
Idaho 0.6%
Illinois 0.6%
Indiana 1.5% X 2.1%
Iowa 0.6%
Kansas 0.6%
Kentucky 1.2% X 1.8%
Louisiana 0.6%
Maine 0.6%
Maryland 0.6%
Massachusetts 0.6%
Michigan 0.6%
Minnesota 0.6%
Mississippi 0.6%
Missouri X X 0.6%
Montana 0.6%
Nebraska 0.6%
Nevada 0.6%
New Hampshire 0.6%
New Jersey X 0.6%
New Mexico 0.6%
New York 1.2% X 1.8%
North Carolina 1.2% X 1.8%
North Dakota 0.6%
Ohio 1.2% X 1.8%
Oklahoma 0.6%
Oregon 0.6%
Pennsylvania 0.6%
Puerto Rico 0.6%
Rhode Island X X 0.6%
South Carolina X X 0.6%
South Dakota 0.6%
Tennessee 0.6%
Texas 0.6%
Utah 0.6%
Vermont 0.6%
Virginia 0.6%
Virgin Islands 1.2% X 1.8%
Washington 0.6%
West Virginia 0.6%
Wisconsin X X 0.6%
Wyoming 0.6%