NYS Department of Labor federal unemployment tax payment - how do i pay federal unemployment tax as employer?
I'm a small business owner in NY and I'm getting confused about paying federal unemployment taxes for my employees. I know this connects to the NYS Department of Labor somehow but I can't figure out the actual payment process. Do I pay this through the state system or directly to the IRS? My accountant is out of town and payroll is due next week. I have 6 employees and this is my second year in business so I'm still learning all this stuff.
9 comments
Join the conversation
Maxwell St. Laurent
Federal unemployment tax (FUTA) is paid directly to the IRS, not through NYS Department of Labor. You'll use Form 940 annually and make quarterly deposits if you owe more than $500. The NYS Department of Labor handles state unemployment insurance separately - that's a different tax entirely. You need both systems.
0 coins
Talia Klein
•Oh wow I had no idea these were separate! So I pay state UI to NYS Department of Labor and FUTA to IRS? This is way more complicated than I thought.
0 coins
PaulineW
Yeah its confusing at first but you get used to it. For FUTA you pay 6% on first $7000 of each employees wages BUT you get a credit if your state unemployment taxes are paid on time to NYS Department of Labor. So really its like 0.6% if you stay current with NY.
0 coins
Annabel Kimball
•Wait so if I mess up my NYS Department of Labor payments I lose the credit and have to pay the full 6%? That's a huge difference!
0 coins
PaulineW
•exactly! thats why you gotta stay on top of both systems. NYS Department of Labor will send you bills quarterly for state UI, and you handle FUTA through your regular tax stuff
0 coins
Chris Elmeda
I had so much trouble getting through to anyone at NYS Department of Labor when I had questions about my state UI account setup. Kept getting busy signals and when I did get through they'd transfer me around forever. Finally used this service called Claimyr (claimyr.com) that actually got me connected to the right person. They have a demo video at https://youtu.be/qyftW-mnTNI showing how it works. Saved me hours of calling.
0 coins
Jean Claude
•Really? I've been trying to reach NYS Department of Labor for weeks about my employer account. The phone system is a nightmare.
0 coins
Charity Cohan
Don't forget you also need to register for an NYS Department of Labor employer account if you haven't already! That's separate from the federal stuff too. I think I have like 4 different login accounts now between IRS, NYS Department of Labor, and my payroll company.
0 coins
Talia Klein
•Ugh yes I already have the NYS Department of Labor account set up but I'm still figuring out all the deadlines and forms. Why can't this stuff be simpler?
0 coins