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Federal Unemployment Tax - FUTA

What is the Federal Unemployment Tax (FUTA)?

Federal and state unemployment taxes are paid by employers and provide compensation to individuals who have lost their jobs. The federal unemployment tax rate is 6 percent. The Federal unemployment tax wage base is $7,000, meaning only the first $7,000 of employees’ wages are subject to the tax. Employers pay the FUTA tax, therefore it is not deducted from employee wages.

Does your business have to pay the FUTA tax?

Employers owe FUTA taxes if they meet one of the following requirements:

  • If they paid employee wages of at least $1,500 in any calendar quarter in 2014 or 2015, OR
  • If they had at least one employee, who worked at least one day per week for 20 consecutive weeks in 2014 or 2015.

Wages exempt from FUTA

Certain wages are exempt from the FUTA tax, including insurance premiums and other fringe benefits. Other exclusions found here: http://www.irs.gov/pub/irs-pdf/p15.pdf:

State Unemployment Tax - SUTA

What is the State Unemployment Tax – (SUTA)?

Employers pay state unemployment insurance contributions based on what they pay their employees, up to a certain state wage base. Some states use the same wage base as the federal wage base (of $7,000), others do not.

2019 State Unemployment Insurance Taxable Wage Base

Bolded states changed, either increased or decreased, from 2018 to 2019.

State 2019 Wage Base 2018 Wage Base
Alabama $8,000 $8,000
Alaska $39,900 $39,500
Arizona $7,000 $7,000
Arkansas $10,000 $10,000
California $7,000 $7,000
Colorado $13,100 $12,600
Connecticut $15,000 $15,000
Delaware $16,500 $16,500
District of Columbia $9,000 $9,000
Florida $7,000 $7,000
Georgia $9,500 $9,500
Hawaii $45,900
Idaho $38,200
Illinois $12,960 $12,960
Indiana $9,500 $9,500
Iowa $30,600 $29,900
Kansas $14,000 $14,000
Kentucky $10,500 $10,200
Louisiana $7,700 $7,700
Maine $12,000 $12,000
Maryland $8,500 $8,500
Massachusetts $15,000 $15,000
Michigan* $9,500
Minnesota $34,000 $32,000
Mississippi $14,000 $14,000
Missouri $12,000 $12,500
Montana $33,000 $32,000
Nebraska $9,000 $9,000
Nevada $31,200 $30,500
New Hampshire $14,000 $14,000
New Jersey $34,400 $33,700
New Mexico $24,800 $24,200
New York $11,400 $11,100
North Carolina $24,300 $23,500
North Dakota $36,400 $35,500
Ohio $9,500 $9,500
Oklahoma $18,100 $17,600
Oregon $40,600 $39,300
Pennsylvania $10,000 $10,000
Puerto Rico $7,000
Rhode Island** $23,600 $23,000
South Carolina $14,000 $14,000
South Dakota $15,000 $15,000
Tennessee $8,000 $8,000
Texas $9,000 $9,000
Utah $35,300 $34,300
Vermont $15,600 $17,600
Virgin Islands $24,000
Virginia $8,000 $8,000
Washington $49,800 $47,300
West Virginia $12,000 $12,000
Wisconsin $14,000 $14,000
Wyoming $25,400 $24,700

*Michigan - $9,000 for contributing employers that are not delinquent on UI payments (i.e. most employers).
**Rhode Island - $25,100 for employers in the highest UI tax rate group.

Source: American Payroll Association