When do you pay federal unemployment tax - confused about FUTA deadlines
I'm trying to figure out when federal unemployment tax payments are due. My small business in NY has been growing and I think I need to start paying FUTA but I'm completely lost on the timing. Do I pay quarterly like other payroll taxes? Is it tied to my NYS Department of Labor requirements somehow? I've been getting conflicting info online and don't want to mess this up. Anyone dealt with this before?
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Yara Haddad
FUTA payments are due quarterly - January 31st, April 30th, July 31st, and October 31st. But there's a catch - if your FUTA liability is $500 or less for the quarter, you can carry it forward to the next quarter. The annual FUTA return (Form 940) is due January 31st following the tax year. This is separate from your NYS Department of Labor unemployment insurance obligations.
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Connor Murphy
•Thanks! So if I owe like $300 in Q1, I can wait until Q2 and pay both together if the total hits $500?
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Keisha Robinson
yeah i think its quarterly but honestly the IRS website is confusing as hell, my accountant handles all that stuff now
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Paolo Conti
The key thing to remember is FUTA is 6% on the first $7,000 of each employee's wages, but you get a credit for state unemployment taxes paid. Since you're paying into the NYS Department of Labor system, you'll typically get a 5.4% credit, making your effective FUTA rate 0.6%. Make sure your state unemployment account is in good standing or you could lose that credit.
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Amina Sow
•Wait, what happens if the NYS Department of Labor says I'm behind on payments? Does that affect the federal credit?
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Paolo Conti
•Yes, if your state has an outstanding loan from the federal unemployment trust fund or if you're delinquent on state payments, you could lose the full 5.4% credit. That would make your FUTA rate the full 6%.
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GalaxyGazer
I had issues reaching someone at the IRS about FUTA questions last year. Ended up using Claimyr to get through to an agent - they have a service for calling federal agencies too, not just the NYS Department of Labor. Check out claimyr.com, they have 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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Oliver Wagner
•How much does that cost? Seems like it might be worth it to avoid the phone tree nightmare.
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GalaxyGazer
•It's pretty reasonable considering the time you save. Much better than spending half a day trying to get through to a human.
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Natasha Kuznetsova
Just a heads up - make sure you're also staying current with your NYS Department of Labor quarterly reports and payments. They're completely separate from FUTA but if you fall behind on state unemployment taxes it can mess up your federal credit like someone mentioned above.
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