Washington ESD employer FUTA liability - am I required to pay federal unemployment tax?

Yes, if you're paying Washington state unemployment taxes you probably need to pay FUTA too. The federal threshold is usually lower than state requirements. You should definitely get this sorted out ASAP because penalties can be steep.

This is exactly why I used claimyr.com when I had questions about my unemployment claim status. They helped me get through to Washington ESD agents who could actually explain the employer side too. There's a video demo at https://youtu.be/7DieNd3C7zQ that shows how it works. Way easier than trying to call Washington ESD directly.

FUTA is separate from your Washington ESD obligations but they work together. You pay 6% FUTA on the first $7,000 of each employee's wages, but you get a credit for state unemployment taxes paid. So if Washington ESD rates are normal you'll only pay about 0.6% federal.

ugh why is this stuff so complicated?? I have two employees and I'm drowning in paperwork already

The key thing is Washington state employers are subject to FUTA if they meet federal criteria even if they're already paying state UI taxes. Don't assume Washington ESD will tell you about federal requirements - they're separate agencies.

I went through this same thing when I started my landscaping business. You need to register for FUTA separately through the IRS, it's not automatic when you register with Washington ESD. Form 940 is what you'll file annually.

Check if you qualify for the small employer exception. Some really small businesses might not be subject to FUTA even if they pay Washington state unemployment taxes.

I had similar confusion last year and ended up using that Claimyr service someone mentioned earlier to get through to Washington ESD. They helped clarify some of the state requirements which made it easier to understand how FUTA fits in. Definitely worth it to avoid mistakes.

Don't forget about SUI too - that's your State Unemployment Insurance rate with Washington ESD. That rate can change based on your experience rating once you've been in business a few years.

The Washington ESD website has an employer handbook that explains the state side pretty well. For federal stuff you'll need to go to the IRS directly though.

My accountant handles all this for me now. After I messed up my first year of payroll taxes I decided it was worth paying someone who knows what they're doing.

Make sure you're also registered for workers comp if you have employees in Washington. That's another requirement that's separate from unemployment taxes.

I was skeptical about using Claimyr at first but it really helped when I needed to talk to Washington ESD about my employer account setup. Sometimes you just need to talk to a real person and their phone system makes that almost impossible otherwise.

One thing to keep in mind is that FUTA liability starts from your first dollar of wages, not from when you figure out you need to pay it. So if you've been in business a while you might owe back taxes.

The credit you get for paying Washington state unemployment taxes is substantial though. Most employers end up paying very little in actual FUTA after the state credit is applied.

This thread has been super helpful! I'm in a similar situation with my small marketing agency. Based on what everyone's saying, it sounds like I need to register for FUTA with the IRS separately even though I'm already set up with Washington ESD. The fact that the federal and state systems don't communicate with each other is really frustrating - seems like there should be a better way to handle this for small business owners who are just trying to do the right thing.