How to: Calculate Estimated FUTA for Credit Reduction States.

The chart below taken from Wikipedia.

For the tax year 2011 the following states were credit reduction states. The IRS form can be found here: http://www.irs.gov/pub/irs-pdf/f940sa.pdf

This means that the effective rate for the employer FUTA deposit was increased from the standard .6. If these states are again subject to the credit reduction for the 2012 tax year, the additional amounts are due with the fourth quarter deposit.

Information pertaining to this notice can be found in http://www.irs.gov/pub/irs-pdf/p15.pdf.

RFMS does not attest to the accuracy of this information, this notification is sent as a courtesy only and should be discussed with your accountant before implementing any new accounting procedures.

Optionally, the anticipated additional amounts can be deposited throughout the year. If your accountant advises doing so follow the steps below.

To do this adjust the rate, go to Accounting>File>Human Resources>File>Percentage Tax Rates. Edit the rate to the appropriate rate.

For multiple states See Solution