Washington ESD employer - how often is federal unemployment tax paid?

Thanks! So if I owe less than $500 total for the year, I can just pay it all when I file the 940?

Exactly. If your FUTA liability is $500 or less, you can pay it with your annual return. More than $500 and you need quarterly deposits.

That's a huge difference! So as long as I'm paying my Washington ESD taxes on time, I get that credit?

Yes, as long as Washington is not a credit reduction state and you pay your state unemployment taxes on time. Washington ESD is in good standing so you should get the full credit.

Good to know the dates. I'm still small so I'll probably be under $500 for now but good to plan ahead.

Yeah, it creeps up fast as you hire more people. Better to set aside money quarterly even if you don't have to deposit it.

No, FUTA is different from other payroll taxes. Social Security and Medicare taxes are deposited more frequently, but FUTA has its own schedule.

ok thanks, payroll taxes are so complicated lol

That's reassuring. I'm only planning to hire 2-3 part-time employees initially.

You'll probably be fine then. Just keep track of your FUTA liability throughout the year so you know when you cross the threshold.

I already registered with Washington ESD. Their quarterly payments are due when exactly?

Washington ESD quarterly reports are due April 30, July 31, October 31, and January 31. Same dates as FUTA deposits actually.

That's actually a good idea. Might be easier to budget if I set aside money each quarter.

Exactly! Plus you won't get hit with a big bill at year end if your business grows faster than expected.

Thanks for the reference! I'll check that out.

Publication 15 is definitely the go-to resource. Very detailed but comprehensive.

Yikes, that's expensive. I'll make sure to stay on top of the deadlines.

Yeah, it's not worth the risk. Set calendar reminders well in advance.

True, the Washington ESD website is pretty user-friendly compared to some government sites.

right? way better than trying to navigate irs.gov lol

Good point, but yeah just Washington employees for now. Will keep that in mind if I expand.

Smart to plan ahead. Multi-state payroll gets complicated fast.

I've thought about that. What do you pay for payroll services?

Varies a lot. Some charge per employee per month, others have flat fees. Shop around and compare what's included.

How would I know if Washington had credit reduction issues?

The IRS publishes a list each year of credit reduction states. Washington ESD also would notify employers if this affected us.

Good to know even experienced business owners stay vigilant about this stuff.

Absolutely. Tax compliance is one area where it's better to be overly cautious.

Good advice. I'm trying to set up good bookkeeping habits from the start.

smart move. way easier to stay organized from day one than to fix it later

Can you explain that more? I thought they were the same.

For FUTA, deposits might be due quarterly but the annual return (Form 940) isn't due until January 31st. Similar concept with other payroll taxes.

Oh that's interesting. So if I pay someone $20,000 a year, I only pay FUTA on the first $7,000?

Exactly. FUTA stops at $7,000 per employee. But Washington ESD might have a different wage base for state unemployment taxes.

I don't have one yet but probably should find one soon.

Definitely worth it, especially in the first year when you're learning all the requirements.

Got it, thanks for the summary. Helps to have it spelled out clearly.

That's a good way to think about it - separate systems with different schedules and requirements.

I'm an LLC, does that change anything?

LLC members typically aren't subject to unemployment taxes on their own earnings. But check with a tax professional to be sure.