| By Sam Froio • IRS | Please note that information in this article may be time sensitive and specific to the date it was originally published. Please contact the author for updates to this information. |
The Internal Revenue Service announced an increase in the minimum threshold for Federal Unemployment Tax Act (FUTA) deposits, reducing the tax burden for more than four million small businesses.
As of Jan. 1, employers are required to make a quarterly deposit for unemployment taxes only if the accumulated tax for all employees exceeds $500.
The previous threshold, established in 1970, was $100, meaning if an employer had two or more employees with an annual salary of $7000 or more, the maximum amount the employer collected would total $112 (.8% of $7000), forcing the employer to make quarterly FUTA deposits.
"The IRS is committed to reducing burden on taxpayers whenever we can," said IRS Commissioner Mark W. Everson. "The new rules will help cut paperwork for millions of small businesses."
Raising the requirement lessens the burden for employers with eight employees or less by eliminating the requirement to make up to four FUTA tax deposits yearly.
Sam Froio can be reached
at (904)
665-0776 or sam.froio@irs.gov.
