FUTA Cost Rate Update

Author: Taneil Jaeger/Thursday, December 7, 2017/Categories: California

On November 10, 2017, the U.S. Department of Labor confirmed the Federal Unemployment Tax Act (FUTA) credit reduction states and rates for the 2017 tax year. All employers that are subject to FUTA tax and have paid wages in California and/or the Virgin Islands will see an increase in their 2017 FUTA taxes.

ADP TotalSource FUTA Cost tables have been updated (11/20/17) to reflect the new FUTA cost rates in the states of California and the Virgin Islands. Please keep in mind that the table below reflects the new overall FUTA cost rates for 2017. TotalSource existing clients will only experience an incremental 0.30% cost increase since the FUTA cost rates in these states remained at last year’s total FUTA rate of 2.40% and was not reset to the base FUTA rate of 0.60%.

2017 FUTA Rates:

State	Basic FUTA Rate	2017 Credit Reduction	2017 BCR Add-On	Total 2017 FUTA Rate
California	0.6%	2.10%	0.0%	2.70%
Virgin Islands	0.6%	2.10%	0.0%	2.70%

All other states are subject to the basic FUTA rate 0.6%.

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Tags: Compliance Corner Compliance update 12/7/17

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