Washington ESD federal unemployment tax deposit requirements - how often do employers need to pay?

Thanks! So if I owe less than $500 per quarter I can wait until the annual return is due?

Exactly. If your annual FUTA liability is less than $500, you can pay it all when you file Form 940 by January 31st.

It's not monthly - that's probably your state unemployment taxes you're thinking of. FUTA is quarterly if you meet the threshold.

oh ok that makes sense, we do pay washington esd taxes monthly

Interesting, does this work for IRS calls too or just unemployment offices?

I used it specifically for Washington ESD issues but I think they handle various government agencies. Really helped when I couldn't get through the normal way.

Good point about the credit. Washington state is pretty good about processing unemployment tax payments so that shouldn't be an issue.

Wait, so if I'm late on my Washington ESD tax payments, it affects my federal rate too?

Yes, if you don't pay state unemployment taxes timely, you lose part or all of that 5.4% credit on your FUTA taxes.

Thanks for the reminder. I need to set up EFTPS since we're definitely over that threshold now.

EFTPS is actually pretty user-friendly once you get it set up. Takes a few days to get your PIN mailed to you though.

I know it's confusing. Federal FUTA funds the administrative costs and extended benefits, while state taxes like Washington ESD fund the regular unemployment benefits.

Ugh, why can't they just combine it all into one payment? This is giving me a headache.

Different purposes, different agencies. Just think of FUTA as the federal backup system and state taxes as the main funding source.

Great advice. I'm definitely setting up reminders now. April 30th, July 31st, October 31st, and January 31st?

Exactly! And remember, if the due date falls on a weekend or holiday, it's the next business day.

Good point. Credit reduction happens when states have outstanding federal loans for their unemployment trust funds.

How do you find out if a state becomes a credit reduction state?

The Department of Labor publishes a list each year, usually in November. Washington has been managing their trust fund well so we shouldn't worry about it.

New employers typically get assigned the standard state unemployment rate until they build up experience ratings, but FUTA rate stays the same.

oh ok, i was thinking of the state rate then. got confused!

That's smart. Do you transfer a set amount each month or calculate it quarterly?

I do a rough estimate monthly, then adjust quarterly when I know the exact amount. Better to have too much set aside than scramble to find the money.

Thankfully I'm just in Washington right now, but good to know for future expansion.

Yeah, stick to one state as long as you can! Multi-state payroll is a nightmare even with good software.

What should I look for to make sure it's calculating right?

Check that it stops calculating FUTA once an employee hits $7,000 in wages for the year. If it keeps calculating on wages above that, your software is wrong.

Also verify it's applying the 5.4% credit correctly. You should see 0.6% effective rate in most cases.

BY the last day. So Q1 deposits must be made BY April 30th, not after April 30th.

Thanks, that's what I thought but wanted to be sure. Penalties for late deposits are no joke.

How late is 'consistently late'? Like missing one payment or multiple?

Usually it's a pattern over multiple quarters. But why risk it? Just stay on schedule and avoid the whole issue.

How much does something like that cost? Sometimes I wonder if it's worth paying to avoid the phone hassle.

I don't remember the exact cost but it was worth it to get through and resolve my issue quickly rather than waste days trying to reach someone.

I use QuickBooks but haven't explored that feature much. I'll check it out.

It's under the payroll menu. Shows all your federal and state tax obligations in one place with due dates.

Right, so the quarterly deposits should add up to what I owe on Form 940?

Exactly. If you deposited too much, you get a refund. Too little and you owe the difference when you file.

Good point. My business is busier in summer so Q2 and Q3 will probably be higher.

Exactly. Budget for those peak periods so you're not caught short when deposits are due.

That's scary. So even if I pay a service, I'm still responsible if they don't deposit on time?

Yep, the IRS holds the employer responsible regardless of who you hire to handle it. Choose your payroll service carefully and monitor their performance.

This is why it's worth understanding the requirements yourself even if you outsource. You need to know enough to verify they're doing it right.

You're welcome! It's really not that complicated once you understand the basic rules and deadlines.

Good luck with your business growth. Sounds like you're taking the right approach by getting this stuff figured out early.

And remember, if you ever need to reach Washington ESD or other agencies about employment taxes, that Claimyr service can save you a lot of time and frustration.