Ohio Business Owners and the FUTA Tax
By: Chandra Reau, Staff Accountant
Ohio business owners with employees need to be aware of the 1.5% additional Federal Unemployment Tax Act (FUTA). Since Ohio is one of three remaining states that have not paid off their outstanding loan to the Federal Government, an additional 1.5% of FUTA tax on the first $7,000 of wages per employee is owed.
The FUTA law provides for a 5.4% credit for those employers who pay state taxes timely under an approved UI program. When a state has an outstanding loan, the FUTA credit is reduced until the loan is repaid. The reduction is 0.3% each year and this is the fifth year for Ohio, resulting in the additional 1.5%.
The total FUTA cost per employee in Ohio is 2.1%, or $147.00. When employers file their 940 tax returns for 2015, the additional tax will be calculated and due. The filing deadline is February 1, 2016.
For more information about FUTA and how it will affect your taxes, please contact us today. Our team can quickly provide you with answers to any questions you may have on this or other payroll tax issues.