Learn more about keeping your business compliant with payroll tax requirements.
The Federal Unemployment Tax Act (FUTA) imposes a payroll tax on employers, based on the wages they pay to their employees. Unlike some other payroll taxes, the business itself must pay the FUTA tax. You do not withhold the FUTA tax from an employee's wages.
Is your business required to pay the FUTA tax? It is required to do so if during the current or the preceding calendar year you meet either of the following tests:
Similar to how the federal unemployment compensation program is funded, in order to fund each state's unemployment compensation program almost all the states impose unemployment taxes directly on employers. Also similar to the federal system is the fact that except for a few states, you do not withhold these taxes from your employees' wages.
For a detailed summary about employer liability for unemployment taxes, we have the following article: Employer Liability for Unemployment Taxes
If you are looking for unemployment tax laws specific to your state or jurisdiction, please visit the respective secretary of state or department of labor site.
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