The temporary 0.20% FUTA surtax, which began in 1976, appears to be gone for good. We have been skeptical that it would actually be allowed to expire, since it has been extended eight times, but it has in fact expired and there is no hint of any effort to renew it retroactively. In fact, the House Republican leadership has taken the position that it should not be extended.
The expiration of this surtax will reduce FUTA taxes by about $14 per employee per year. This is at least a token recognition of the fact that employer state UI taxes have increased by an average of $125 per employee over the last two years.
Clearly the Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, will be more complex for 2011. In addition to the 0.20% mid-year reduction, employers in twenty-three states may be facing a 0.30% FUTA increase because of outstanding federal loans.
Attached is a press release from the House Committee on Ways and Means addressing the expiration of the surtax.
If there are any questions please contact Josh Kendall (jkendall@tntnash.com).