The FUTA Tax Liability Report (formerly titled 2011 FUTA Tax Liability Report) will help you make the proper tax deposit amounts when they become due. This report will recap the FUTA wages and taxes for any reporting period.
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FUTA Tax Notes for 2011 |
•FUTA Wages – Wages Subject to FUTA Tax for the reporting period.
•Accrued FUTA – This is the tax amount that was posted with each paycheck as a debit to the Payroll Burden account and a credit to the FUTA tax liability account. The FUTA tax rate is located on the Payroll > Properties > Tax Rates Tab. In 2012 and 2013, the FUTA tax rate is 6.0% but generally you can take a credit for the amount that you pay into a state unemployment fund. If you are entitled to the maximum 5.4% credit and the state is not determined to be credit reduction state, then the tax rate is 0.6%.
"A state that has not repaid money it borrowed from the federal government to pay unemployment benefits is a "credit reduction state." The Department of Labor determines these states. If an employer pays wages that are subject to the unemployment tax laws of a credit reduction state, that employer must pay additional federal unemployment tax when filing its Form 940." (http://www.irs.gov/pub/irs-pdf/p15.pdf)
•If you have payroll in only one state, and your state is a credit reduction state, then enter the proper tax rate in the FUTA field.
•If you have payroll in multiple states, and one or more of the states is a credit reduction state, use 0.6% as the FUTA tax rate. Due to the fact that there is only one FUTA tax rate field, you will need to manually adjust the FUTA tax rate accrual with a general journal entry.
•Actual FUTA – This is the actual tax amount that is due based on the Federal FUTA tax rate of 0.6% for wages with a check date of July 1, 2011 or after. For wages with a check date prior to July 1, 2011, the tax amount will be calculated at a rate of 0.8%. (Refer to the FUTA Tax Notes for 2011 for more information.)
•Over/(Under) – This amount will be the difference between what has been accrued as an expense and what is actually due. You can make a general journal entry to adjust the accrued liability amount as needed and offset it to your payroll burden expense account. Again, if you are in a credit reduction state, refer to the single state/multiple states notations above and consider how this may impact the report. Please check with your CPA if you are uncertain of the FUTA tax rate for your company.