FUTA Credit Reduction Act to Affect 20 States

November 29, 2011 by Wayne Schulz

The DOL released its long-anticipated list of 2011 FUTA “credit-reduction” states on November 18, 2011. Employers in these 20 states and the Virgin Islands will experience associated tax increases.

The standard FUTA rate is 6.0% on the first $7,000 of wages. Employers in most states receive a credit of 5.4% against the rate, resulting in a net tax rate of .6%. However, some states had Federal Unemployment Trust Fund loans – taken to keep their unemployment insurance benefit programs solvent during recent periods of extended high unemployment that were still outstanding. As a result, these states will have their FUTA credit amount reduced for 2011 filing in a way to recover funds still owed to pay back these loans, resulting as noted, in higher taxes for employers in those states.

Instead of the standard 5.4% credit allowed, employers in these states will have a reduced credit of 5.1% for 2011, making their FUTA tax rate .9%.

Arkansas
California
Connecticut
Florida
Georgia
Illinois
Kentucky
Minnesota
Missouri
North Carolina
New Jersey
Nevada
New York
Ohio
Pennsylvania
Rhode Island
Virginia
Virgin Islands
Wisconsin

The following exceptions apply:

Employers in Indiana will have their credit reduced from 5.4% to 4.8% for 2011, making their FUTA tax rate 1.2%

Employers in Michigan will have their credit reduced from 5.4% to 4.5% for 2011, making their FUTA tax rate 1.5%

IMPORTANT NOTE: All rate calculations above are based on the current FUTA rate of 6.0%. This rate has been in effect since 7/1/11, when the .2% FUTA surtax expired. It is not known at this time how the IRS will handle the split year rates on its FUTA credit reduction calculations. Further guidance from the IRS is forthcoming.

The credit reduction only applies to employers who SUI wages to the states listed above. All other employers will receive the full FUTA tax credit of 5.4%.

IRS RULES CHANGE FREQUENTLY. CONSULT YOUR TAX ADVISOR FOR THEIR ASSISTANCE WITH THE ABOVE.

We believe the information above is accurate as of the date published – 11/29/11 – though changes may occur which are NOT reflected above. Schulz Consulting is NOT in the business of providing tax or accounting advice. You are advised to only make changes based on the advised of your financial professional.

FUTA Credit Reduction Act 20110-2012

2011 Form 941 Draft Copy for MAS90 Users

March 12, 2011 by Wayne Schulz

Here’s a draft copy of what the IRS Form 941 changes for MAS90 and MAS200 users should look like. Check the IRS web site for the final forms or consult with your Sage Business Partner to have them help load the MAS90 Payroll update changes to your payroll system.

IRS 941 2011

941 Q2 2011 Form Changes for MAS90 and MAS200

March 12, 2011 by Wayne Schulz

On March 1, 2011 the Federal government issued their final updates to the 2011 Form 941 (here’s a PDF of the draft copy). The Sage ERP MAS 90 and 200 team is coding to this updated form and will release the change via a Hot Fix for Payroll versions 4.4, 4.3 and 4.2.

Users of versions prior to 4.2 should be aware that the form updates (as well as tax tables) will no longer be maintained for those unsupported versions.

These changes will also be incorporated into Product Update 5 for Sage ERP MAS 90 and 200 version 4.4, and Product Update 22 for version 4.3.

This updated 941 payroll form makes required changes for the legislation in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 that reduced the employee Social Security rate from 6.2% to 4.2% for one year, effective with wages earned beginning Jan. 1, 2011). Also included – changes from the 2010 version: elimination of lines for the payroll tax exempt. in the HIRE Act (lines 6a-6c), because the exemption may not be claimed on wages after Dec. 31, 2010; (2) removing the advance earned income credit line (line 9), due to the advance earned income credit not being eligible for claim after Dec. 31, 2010; and (3) the addition of a new line for the FICA tax due on unreported tips. Some information from the 2010 form 941 have been put on different lines (e.g., quarterly adjustments for sick pay moved from line 7b to line 8).

The hot fixes and product updates are currently targeted to be posted on Sage Online, Sage ERP MAS Support section close to the end of March 2011. In addition, the Q2 2011 Tax Table Update is currently targeted to be posted at the same location at approximately the same time.

Please check the download site or the Sage MAS Community forum throughout March for additional late-breaking information.

Sage MAS90 Tax Tables

Sage Summit 2011 Agenda

February 7, 2011 by Wayne Schulz

The detailed conference schedule is due to go live on March 8, 2011 and today (February 7, 2011) is the day by when users submissions for teaching sessions will be decided upon (expect to hear whether you’re presenting by mid-February).

Sage Summit 2011 Learning Tracks

This high level overview (click the image above for a more readable view) provides a better idea of the types of sessions that will be offered during this 5 day joint customer and partner conference starting July 11, 2011 in Washington DC.

via: Sage Summit 2011 Call For Presentations

Sage Summit 2011 Learning Tracks

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