FUTA Credit Reductions

Thirteen states and the U.S. Virgin Islands have Federal Unemployment Tax Act credit reductions for 2013.

• Delware has a 0.6% credit reduction that requires employers to pay up to $42 in additional FUTA costs for each employee for 2013.
• Arkansas, California, Connecticut, Georgia, Kentucky, Missouri, New York, North Carolina, Ohio, Rhode Island, and Wisconsin have a credit reduction of 0.9%, increasing FUTA costs by up to $63 per employee.
• Indiana has a credit reduction of 1.2% that increases FUTA costs by up to $84 per employee. The state prevented the benefit cost rate add-on of an additional $14 per employee with a fifth-year waiver application that the Labor Department approved.
• The U.S. Virgin Islands has a credit reduction of 0.9% plus an extra credit reduction of 0.3% for 2014. This extra credit reduction can apply for jurisdictions that do not achieve solvency goals established by the Labor Department.
• Arizona, Florida, Nevada, New Jersey, and Vermont do not have credit reductions for 2013 and repaid their loan balances for 2012.
• South Carolina’s credit reduction avoidance application was approved by the Labor Department, so they will not have a 2013 credit reduction despite having a federal unemployment loan balance.