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Presidential Proposed Budget 2015 – Make Unemployment Surtax Permanent

by | May 14, 2014 | Tax and Accounting Desk

The Federal Unemployment Tax Act (FUTA) currently imposes a federal payroll tax on employers at 6.0 percent of the first $7,000 paid annually to each employee.

States also impose an unemployment tax on employers (SUTA or SUI). Many employers allowed a credit for state unemployment taxes of up to 5.4 percent, making the minimum net federal tax rate 0.6 percent.

In 1976 the federal tax rate added a temporary surtax of 0.2 percent, bringing the rate to 6.2 percent. The surtax had been extended several times but expired on July 1, 2011.

Reasons for Change

The Presidential Proposed budget for  2015 includes a proposal reinstating the surtax and making it permanent. The proposal would be effective for wages paid on or after January 1, 2015.

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