When does NYS Department of Labor collect federal unemployment tax payments from employers?
I'm trying to understand the timeline for federal unemployment tax payments in NY. My small business has been paying state UI taxes quarterly to NYS Department of Labor, but I'm confused about when the federal portion (FUTA) gets collected and how it works with our state payments. Does anyone know if NYS Department of Labor coordinates this or if it's completely separate? I want to make sure we're not missing any deadlines.
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Esteban Tate
Federal unemployment tax (FUTA) is actually separate from your NYS Department of Labor payments. FUTA gets paid directly to the IRS, usually annually by January 31st if you owe more than $500. Your state UI taxes to NYS Department of Labor can give you a credit against the federal tax though - up to 5.4% credit if your state taxes are current.
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Alice Pierce
•Oh that makes sense! So the NYS Department of Labor quarterly payments we make actually help reduce what we owe federally?
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Ivanna St. Pierre
Yeah the federal and state systems work together but they're collected separately. For FUTA you pay 6% on the first $7,000 of each employee's wages, but if you're current on your NYS Department of Labor payments you get a 5.4% credit so you only pay 0.6% federal. Make sure your state account is in good standing or you lose that credit.
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Elin Robinson
•wait so if I'm behind on my NYS Department of Labor payments it affects my federal rate too?? that's crazy
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Ivanna St. Pierre
•Exactly! If NYS Department of Labor shows you as delinquent, the IRS won't give you the full credit and your federal rate goes up. It's all connected.
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Atticus Domingo
I had issues reaching someone at NYS Department of Labor about this exact question last year. Kept getting disconnected when trying to verify our account status before filing federal taxes. Finally used a service called Claimyr (claimyr.com) that got me through to an actual agent - they have a video demo at https://youtu.be/qyftW-mnTNI showing how it works. Saved me hours of calling.
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Alice Pierce
•That's really helpful, thanks! I've been dreading trying to call NYS Department of Labor about this.
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Beth Ford
just fyi the due dates are different too - your NYS Department of Labor quarterly payments are due by the end of the month after each quarter ends, but FUTA is due January 31st for the whole previous year (if you owe over $500, otherwise you can pay with your 940 form
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