NYS Department of Labor employer liability under federal unemployment tax act - help needed
My small business just got a notice from NYS Department of Labor about federal unemployment tax act requirements and I'm completely lost. We have 8 employees and I thought I was handling everything correctly through the state system. The notice mentions liability calculations and I have no idea what this means for my business. Are there specific thresholds that trigger federal unemployment tax act obligations? I've been paying into the NY unemployment system but apparently there's more to it. Can someone explain what employers need to know about federal unemployment tax act compliance in New York?
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Dylan Cooper
Yes, under the federal unemployment tax act (FUTA), employers are liable if they paid wages of $1,500 or more in any calendar quarter, or had one or more employees for some part of a day in any 20 or more different weeks during the year. Since you have 8 employees, you definitely meet the threshold. The current FUTA tax rate is 6.0% on the first $7,000 of each employee's wages, but you can get a credit of up to 5.4% for paying state unemployment taxes to NYS Department of Labor on time.
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Fatima Al-Suwaidi
•So basically I'm paying 0.6% if I stay current with my NYS Department of Labor payments? That doesn't sound too bad but I'm worried I missed something in previous quarters.
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Sofia Morales
You need to file Form 940 annually for FUTA taxes. Make sure your NYS Department of Labor account is in good standing because any late payments to the state can affect your FUTA credit. I learned this the hard way when I was a few days late on a quarterly payment and lost part of my credit for that year.
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StarSailor
•Wait, how late is too late? I think I might have been a day or two behind on my last NYS Department of Labor payment...
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Sofia Morales
•Even one day late can impact your FUTA credit for that year. Check your NYS Department of Labor account immediately and make sure all payments are current going forward.
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Dmitry Ivanov
ugh the whole system is so confusing! federal unemployment tax act, state unemployment, workers comp - feels like they want to bury small businesses in paperwork. why cant they just have ONE system that handles everything??
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Ava Garcia
If you're having trouble reaching someone at NYS Department of Labor about your employer account, I had luck using a service called Claimyr (claimyr.com). They helped me get through to an actual person when I had questions about my SUTA rates. There's a demo video at https://youtu.be/qyftW-mnTNI that shows how it works. Saved me hours of being on hold.
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Fatima Al-Suwaidi
•Thanks, I'll check that out. I've been trying to call NYS Department of Labor for weeks about my account status and keep getting disconnected.
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Miguel Silva
Don't forget about quarterly deposits if your FUTA liability exceeds $500 in any quarter. You can't wait until year-end to pay everything. The IRS wants their money on time just like NYS Department of Labor does with state unemployment taxes.
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