Where to pay federal unemployment tax - NYS Department of Labor employer requirements
I just started my own small business in NY and hired my first employee last month. I know I need to pay federal unemployment tax but I'm completely lost on where to actually send the payment. The IRS website is confusing and I can't figure out if I pay this through the NYS Department of Labor system or directly to the federal government. My accountant is out of town and I don't want to miss any deadlines. Has anyone dealt with this before? Do I use Form 940 and mail it somewhere or is there an online portal?
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Zoe Papadopoulos
Federal unemployment tax (FUTA) is paid directly to the IRS, not through NYS Department of Labor. You'll file Form 940 annually and make quarterly deposits using EFTPS (Electronic Federal Tax Payment System) at eftps.gov. The current FUTA rate is 6.0% on the first $7,000 of each employee's wages, but you get a credit of up to 5.4% if you pay your state unemployment taxes on time to NYS Department of Labor.
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Andre Laurent
•Thank you! So I need to register for EFTPS separately from my NYS Department of Labor account? And the 5.4% credit means I'd only pay 0.6% if I'm current with NY state taxes?
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Jamal Washington
Yeah you definitely want to set up EFTPS for federal deposits. But don't forget you also need to register with NYS Department of Labor for state unemployment insurance - that's a separate system entirely. The state rate varies but it's usually higher than the federal rate, especially for new employers.
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Mei Wong
•This is so confusing with all the different systems. Why can't they just combine everything into one payment portal?
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Liam Fitzgerald
I had the same issue when I started my business two years ago. The key thing is federal and state unemployment taxes are completely separate systems. Federal goes to IRS via EFTPS, state goes to NYS Department of Labor. Make sure you get registered for both ASAP because there are penalties for late registration.
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Andre Laurent
•Did you have any trouble with the NYS Department of Labor registration? I submitted my application online but haven't heard back yet.
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Liam Fitzgerald
•NYS Department of Labor usually takes 2-3 weeks to process new employer registrations. You should get your account number and rate notice by mail. If it's been longer than that, definitely call them.
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PixelWarrior
Just went through this nightmare myself. If you need to actually talk to someone at the IRS about FUTA payments, good luck getting through on the phone. I spent hours on hold. There's actually a service called Claimyr at claimyr.com that helps people get through to government agencies when the phone lines are jammed. They have a demo video at https://youtu.be/qyftW-mnTNI showing how it works. Might be worth checking out if you get stuck trying to reach anyone.
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Amara Adebayo
•Never heard of that service but honestly anything that helps deal with government phone systems sounds useful. The IRS business line is always busy.
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Giovanni Rossi
wait so federal unemployment tax isnt the same as what employees pay for social security?? im so confused about all these different taxes
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Zoe Papadopoulos
•No, they're completely different. FUTA (federal unemployment tax) is paid only by employers and funds the federal unemployment system. Social Security and Medicare taxes are split between employer and employee. Unemployment taxes (both federal and state) are 100% employer responsibility.
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