NYS Department of Labor FUTA requirements - who does unemployment insurance fund require to contribute?
I'm trying to understand the Federal Unemployment Tax Act requirements for my small business in New York. Who exactly is required to contribute to the unemployment insurance fund? I have 3 part-time employees and I'm not sure if I need to start paying into the NYS Department of Labor unemployment system. Can someone break down the FUTA contribution requirements?
9 comments
Join the conversation
Sophia Gabriel
Under FUTA, employers are required to contribute to the unemployment insurance fund if they meet certain criteria. In New York, you must pay unemployment insurance taxes if you paid wages of $300 or more in any calendar quarter, or if you had one or more employees for some portion of a day in any 20 different weeks during the year. The NYS Department of Labor administers this program and you'll need to register with them.
0 coins
Vince Eh
•Thanks! So even with just part-time workers, if I hit that $300 threshold in a quarter I need to contribute? Do I register directly with NYS Department of Labor or is there a separate process?
0 coins
Tobias Lancaster
Yes, most employers have to contribute. The current FUTA tax rate is 6.0% on the first $7,000 of wages per employee per year, but you can get a credit of up to 5.4% if your state unemployment taxes are paid on time. So effectively you're looking at 0.6% federal rate plus whatever New York's state unemployment insurance rate is for your business type.
0 coins
Ezra Beard
•wait so theres both federal AND state unemployment taxes?? i thought it was just one thing. this is confusing
0 coins
Tobias Lancaster
•Yes, there are both. FUTA is federal, and then each state has its own unemployment insurance program. The NYS Department of Labor handles New York's portion. You pay both but the federal portion is reduced if you pay your state taxes on time.
0 coins
Statiia Aarssizan
I had trouble getting through to the NYS Department of Labor when I needed to set up my unemployment insurance account. Kept getting busy signals and when I did get through, got transferred around. Eventually found this service called Claimyr at claimyr.com that helped me reach an actual agent. They have a video demo at https://youtu.be/qyftW-mnTNI showing how it works. Made the whole registration process much smoother.
0 coins
Reginald Blackwell
•Interesting, never heard of that service. Did they help specifically with the employer registration process or just general NYS Department of Labor contact issues?
0 coins
Aria Khan
ugh the whole unemployment tax system is such a pain. why do small businesses have to jump through all these hoops just to hire people?? the paperwork alone is ridiculous
0 coins
Sophia Gabriel
•I understand the frustration, but the unemployment insurance fund is what provides benefits to workers who lose their jobs through no fault of their own. It's an important safety net that requires employer contributions to function.
0 coins