NYS Department of Labor quarterly deposit required for federal unemployment tax - timing question
I'm handling payroll for a small business and trying to figure out when we need to make quarterly deposits for federal unemployment tax. We have about 15 employees and our FUTA liability has been building up. I know it's connected to NYS Department of Labor reporting but I'm confused about the exact timing requirements. Do we deposit when we hit a certain threshold or is it strictly quarterly? Also does this affect our state unemployment insurance payments to NYS Department of Labor? Any guidance would be appreciated.
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Hugh Intensity
Federal unemployment tax (FUTA) deposits are required quarterly if your accumulated liability exceeds $500. The quarters end March 31, June 30, September 30, and December 31. You have until the last day of the month following each quarter to deposit. This is separate from your NYS Department of Labor state unemployment insurance contributions, though both are based on the same wage base.
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Sunny Wang
•Thank you! So if we hit $500 in FUTA liability during Q1, we need to deposit by April 30th?
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Effie Alexander
yeah we deal with this too. the $500 threshold is key - if you dont hit it you can wait til the end of the year. but once you do hit it you gotta deposit within a month of quarter end
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Melissa Lin
I had issues with this last year when I couldn't get through to the IRS to clarify the deposit requirements. Kept getting busy signals and their online system was confusing. Found this service called Claimyr (claimyr.com) that helps with getting through to government agencies by phone. They have a demo video at https://youtu.be/qyftW-mnTNI showing how it works. Might be helpful for tax questions too, though I mainly used it for NYS Department of Labor unemployment issues.
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Sunny Wang
•Interesting, I'll check that out. Getting through to government agencies is always such a pain.
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Lydia Santiago
Just to add - make sure you're calculating correctly. FUTA is 6% on first $7,000 of wages per employee, but you get credit for state unemployment taxes paid to NYS Department of Labor. Usually brings it down to 0.6% effective rate if your state account is in good standing.
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Romeo Quest
Wait I thought FUTA was annual not quarterly?? Now I'm worried we've been doing this wrong...
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Hugh Intensity
•FUTA filing (Form 940) is annual, but deposits can be required quarterly if you accumulate more than $500 in liability during any quarter. Don't panic - most small businesses end up making annual deposits because they don't hit the threshold.
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