FUTA Reminders for 2012

All of the states have now announced their taxable wage bases for 2012. As usual, there are a number of increases over the wage bases set last year. In addition, Nevada has a decrease in its taxable wage base for 2012. In the table below, states having higher 2012 wage bases than the 2011 wage bases are printed in bold. Nevada, with its lower amount, appears in italics.

FUTA tax figures for 2012

The taxable wage base under the Federal Unemployment Tax Act remains $7,000 for 2012. In addition, all 50 states, as well as the District of Columbia, Puerto Rico and the Virgin Islands, have received certifications for the maximum additional credit allowable based on the 12-month period ending on October 31, 2011.

0.2% surtax expires

The FUTA tax rate is 6.2% for wages paid on or after January 1, 2011, through June 30, 2011. It decreases to 6.0% for wages paid after July 1, 2011, through December 31, 2011, because of the mid-year expiration of the FUTA surtax. As we go to press, there has been no legislation reenacting the surtax for either the latter part of 2011 or for 2012.

Credit reduction states

Employers that pay their state unemployment tax timely and in full receive a 5.4% credit. However, that credit is reduced when a state has outstanding federal loans for two consecutive Januarys. The reduction is 0.3% for the first year and an additional 0.3% for each succeeding year until the loan is repaid. A state that has not repaid the money it has borrowed is called a credit reduction state.

The 0.3% credit reduction states for 2011 (for taxes paid in 2012) are Arkansas, California, Connecticut, Florida, Georgia, Illinois, Kentucky, Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Virginia and Wisconsin, plus the U.S. Virgin Islands. Indiana is a 0.6% credit reduction state and Michigan is a 0.9% credit reduction state. South Carolina has received conditional approval for the full FUTA credit.

Taxable Wage Bases for 2012
State — 2012 Wage Base
Alabama — 8,000
Alaska — 35,800
Arizona — 7,000
Arkansas — 12,000
California — 7,000
Colorado — 11,000
Connecticut — 15,000
Delaware — 10,500
District of Columbia — 9,000
Florida — 8,500
Georgia — 8,500
Hawaii — 38,800
Idaho — 34,100
Illinois — 13,560
Indiana — 9,500
Iowa — 25,300
Kansas — 8,000
Kentucky — 9,000
Louisiana — 7,700
Maine — 12,000
Maryland — 8,500
Massachusetts — 14,000
Michigan — 9,500
Minnesota — 28,000
Mississippi — 14,000
Missouri — 13,000
Montana — 27,000
Nebraska — 9,000
Nevada — 26,400
New Hampshire — 14,000
New Jersey — 30,300
New Mexico — 22,400
New York — 8,500
North Carolina — 20,400
North Dakota — 27,900
Ohio — 9,000
Oklahoma — 19,100
Oregon — 33,000
Pennsylvania — 8,000
Puerto Rico — 7,000
Rhode Island — 19,600*
South Carolina — 12,000
South Dakota — 12,000
Tennessee — 9,000
Texas — 9,000
Utah — 29,500
Vermont — 16,000
Virgin Islands — 23,700
Virginia — 8,000
Washington — 38,200
West Virginia — 12,000
Wisconsin — 13,000
Wyoming — 23,000

* Rhode Island has a two-tier taxable wage base for 2012. For most employers it will be $19,600. For those in the highest tax group (9.79%), the taxable wage base will be $21,100.