By January 31, 2013, employers in CA will be paying $42 per employee in additional FUTA (Federal unemployment tax) because the State of CA's "leaders" spent more than they received from the Feds to pay for unemployment. The word they are using is "shortfall", and it must be made up. So, for the 2nd year in a row, CA employers will be paying additional FUTA taxes: $42 for each employee on the books for 2012 if the employee made at least $7,000. So, if you employ 20 people, likely there was at least a 10% turnover rate. So, 22 (not 20) times $42 = $924 that you will have to pay in January in addition to regular FUTA and other payroll taxes. CA has it easy - in some states, employers will pay up to $63 per employee.
This was a relatively simplified overview. There is much more to it, and I'm sure I'm missing the point somewhere. All I see is another cost to be borne. Still, make sure your payroll company makes the adjustments so you can make the payments. If you don't use a payroll company, ask your tax consultant; you'll need to pay otherwise there will be additional penalties on top of the "shortfall".
Ain't it great! For those outside of CA, here are the numbers (provided by the US Government but most immediately by Steve Evans, of Ovation Payroll (email@example.com) :
· 0.9 percent: Indiana
· 0.6 percent: Arkansas, California, Connecticut, Florida, Georgia, Kentucky, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Rhode Island, and Wisconsin.
· 0.3 percent: Arizona, Delaware, and Vermont.
Again, the rates above will be applied to the 1st $7,000.00 that each FUTA taxable employee earned for the tax year 2012 and is due with the employer’s Federal Form 940 by January 31, 2013. Companies can receive a copy of the Schedule A that is filed with the IRS form 940 by using this link: http://www.irs.gov/pub/irs-pdf/f940sa.pdf