Payroll Perspectives: Lingering State Loan Balances Could Reduce FUTA Credits and Raise Costs for Employers in 2013

The Bloomberg BNA Tax Management Weekly State Tax Report filters through current state developments and analyzes those critical to multistate tax planning.

In states that have borrowed from the federal government to continue paying unemployment insurance benefits, employers will see a reduction in the maximum FUTA credit if their state carries an outstanding federal loan balance for two consecutive years. This article, which lists those states projected to place higher FUTA costs on employers for 2013, “serves to remind businesses of the importance of proactive unemployment insurance tax management,” according to author Debera Salam, Director of Ernst & Young LLP's Payroll Information and Process Services.