Effective July 1, 2011, the FUTA rate will lower from 6.2% to 6.0% on the first $7,000 of wages paid to an employee.
In 1976, the government added a “temporary” 0.2% surtax to FUTA (Federal Unemployment Tax Act) to repay unemployment benefits paid out during the 1973-1975 recession. Although the “debt” was fully repaid in 1987, the surtax remained in effect until the end of last month. After being extended eight times over the past 35 years, the House refused to extend any further past this most recent expiration date. House Ways and Means Committee Chairman Dave Camp (R-MIch) stated, “We need employers paying more salaries, not paying higher taxes.”
Be sure to run necessary updates within your accounting software (QuickBooks, Peachtree, etc.) to reflect this change.