Ohio Employers to Pay More FUTA on 2013 Returns– November 22, 2013

As a result ofOhio’s failure to repay outstanding federal loans related to the state’s unemployment insurance for the past four years, Ohio employers will be unable to claim the maximum state unemployment tax credits on their 2013 federal unemployment tax (FUTA) return. Consequently, employers will experience an increase of up to $63 in FUTA tax per employee on this year’s returns.

Other credit reduction states/territories named by the U.S. Department of Labor (DOL) for defaulting on their loans includes, Arkansas, California, Connecticut, Delaware, Georgia, Indiana, Kentucky, Missouri, New York, North Carolina, Ohio, Rhode Island, Wisconsin and the Virgin Islands. Instead of the typical net FUTA tax rate of 0.6%, employers in these areas will pay more, as outlined in the schedule below. Resulting rates are based on the number of years each state has been in default on its unemployment insurance loans.

State Credit Reduction 2013 Maximum Additional
FUTA Tax Per Employee*
Arkansas 0.9% $63
California 0.9% $63
Connecticut 0.9% $63
Delaware 0.6% $42
Georgia 0.9% $63
Indiana 1.2% $84
Kentucky 0.9% $63
Missouri 0.9% $63
New York 0.9% $63
North Carolina 0.9% $63
Ohio 0.9% $63
Rhode Island 0.9% $63
Virgin Islands 1.2% $84
Wisconsin 0.9% $63

* As compared to employers not in credit reduction states.

For more information on the impact to your business, contact a member of your service team.

This communication is for information only, and any action should only be taken after a detailed review of the specific situation and appropriate consultation.

Notwithstanding that these materials do not constitute legal, accounting or other professional advice, as may be required by United States Treasury Regulations and IRS Circular 230, you should be advised that these materials are not intended or written to be used, and cannot be used by you or any other person, for the purpose of avoiding penalties that may be imposed under federal tax laws. No written statement contained in these materials may be used by any person to support the promotion or marketing of or to recommend any federal tax transaction(s) or matter(s) addressed in these materials, and any taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor with respect to any such federal tax transaction matter.