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Federal Unemployment Tax (FUTA) Taxes to Increase for 2011 and 2012 Federal law requires that if a state has received a trust fund advance (loan) and has not repaid it within two years, the federal credit on FUTA taxes will be reduced by 0.3 percent, making that state a “credit reduction state.” For each year that a state has not repaid its trust fund advance, the credit may be reduced by 0.3 percent. Ohio became a credit reduction state beginning with calendar year 2011. During the recent recession, Ohio was one of many states that had to borrow money to pay unemployment compensation. As a result, we are one of 21 states where employers are facing a federally mandated offset credit reduction. This means that the effective FUTA tax rate for calendar year 2011 (FUTA taxes payable on IRS form 940 in Jan. 2012) increased from 0.8 percent to 1.1 percent. This equates to an additional $21 ($7,000 x 0.3 percent) per covered employee per year. |
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OPGMA is an organization of produce growers and marketers whose goal is to produce exceptional quality crops, for consumers and processors, utilizing environmentally friendly practices. OPGMA provides educational opportunities to businesses, families, and employees associated with the production and marketing of Ohio's fresh produce.
