Software Club 210: Light Red/Club_Software_210_Light_Red_Micro_Star_1997.iso/sba/f260.sbe

Text File | 1997-01-26 | 15KB | 474 lines

@096 CHAP 5

        ┌──────────────────────────────────────────────┐
        │     FEDERAL AND STATE UNEMPLOYMENT TAXES     │
        └──────────────────────────────────────────────┘

With relatively few exceptions, all businesses with employees
must pay unemployment taxes, both federal and state.  The
federal tax (and in most states, the state tax as well) is
imposed entirely upon the employer.  The federal unemployment
tax in 1996 is nominally 6.2% of the first $7,000 of annual
wages per employee.

In practice, however, the federal rate is usually only 0.8%
(for a maximum tax of $56 per employee), since a credit
for up to 5.4% is given for state unemployment taxes paid,
or if the employer has a favorable "experience rating" for
state unemployment tax purposes in @STATE.

@IF120xx]NOTE RE UNEMPLOYMENT TAX FOR @NAME:
@IF120xx]------------------------------------------------------------
@IF120xx]Since you are operating as an owner of an unincorporated
@IF120xx]business, rather than as an employee of a corporation, your
@IF120xx]personal earnings from the business are not subject to state
@IF120xx]or federal unemployment taxes.  This will save your firm
@IF120xx]several hundred dollars a year of such taxes on your business
@IF120xx]earnings, as compared to what you would pay if you were
@IF120xx]operating @NAME as a corporation.
@IF120xx]
@IF120xx]Remember, also, that if you and/or your spouse are the only
@IF120xx]owners of the business, you may hire your children, under
@IF120xx]age 21, to work in the business, free of any unemployment
@IF120xx]taxes.  (This would not be true if the business were to be
@IF120xx]incorporated.)
@IF120xx]------------------------------------------------------------
@IF120xx]
    . FEDERAL UNEMPLOYMENT TAX ("FUTA").

Your business will be required to pay FUTA taxes for any
calendar year if during any calendar quarter of the current
or preceding calendar year you paid wages of $1,500, or if
during either year you had one or more employees for at
least a portion of a day during any 20 different calendar
weeks during the year.  You must count individuals on
vacation and sick leave in making this determination.

Needless to say, this will cover almost any business that
has even one employee, even part-time.

If the FUTA liability during any of the first 3 calendar
quarters is more than $100, you must deposit the tax with a
federal tax deposit coupon at an authorized bank during the
month following the end of the quarter.  If the tax is $100
or less, you are not required to make a deposit, but you
must add it to the taxes for the next quarter.  For the
fourth quarter, if the undeposited FUTA tax for the year is
more than $100, deposit the tax with a tax deposit coupon
by January 31.  If the balance due at year-end is $100 or
less, either deposit with the coupon or mail it in with
your federal unemployment tax return (Form 940) by January
31.  Form 940 is not due until February 10 if all of the
FUTA tax for the prior year has already been deposited when
due.

NOTE FOR SMALL EMPLOYERS:  The IRS now offers Form 940-EZ,
which is a greatly simplified FUTA return for small
employers.  In general, the small employers who can use
the simplified 940-EZ form are those who:

        . Pay unemployment tax to only one state;

        . Pay all state unemployment taxes by Form 940-EZ's
          due date; and

        . Whose wages subject to FUTA are also taxable for
          state unemployment tax purposes.


    . @STATE UNEMPLOYMENT TAX.

The state also imposes an unemployment tax, which meshes
closely with the federal unemployment tax.

The state unemployment tax is imposed on the employer (only)
in all states except Alaska, New Jersey and Pennsylvania.
@CODE: AK NJ PA
In @STATE, most of the tax is imposed on the employer.
@CODE:OF
@CODE: AK
However, a 0.5% tax also applies to the employee.  Both the
employer and employee are subject to tax only on the first
$24,400 of annual wages of the employee (in 1996).

@CODE:OF
@CODE: PA

    . RATE:       3.6645% (1996 rate).

    . WAGE BASE:  The first $8,000 of wages (for 1996).

However, a 0.03% tax also applies to the employee under
the Pennsylvania unemployment tax law.

@CODE:OF
@CODE: NJ

    . RATE:       2.8% (1997 rate).

    . WAGE BASE:  The first $18,600 of wages (for 1997).

However, a 0.625% tax (for state temporary disability
insurance) also applies to the employee under the New Jersey
unemployment tax law, with the employer required to also
contribute 0.5% towards the disability insurance.

@CODE:OF
@CODE: AL AZ AR CA CO CT DE DC FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NB NV NH NM NY NC ND OH OK OR RI SC SD TN TX UT VT VA WA WV WS WY
@CODE:NF
The state unemployment tax is imposed on the employer, not
the employee, in @STATE.

The unemployment tax rate for a new employer in the state
of @STATE is:

@CODE:OF
@CODE: CO
    . RATE:       2.8% of the wage base (1996 rate)

    . WAGE BASE:  The first $10,000 of wages per employee
                  (for 1996).

@CODE:OF
@CODE: DE
    . RATE:       2.4% of the wage base, generally (1996 rate),
                  for non-construction industry, generally.

    . WAGE BASE:  The first $8,500 of wages per employee
                  (for 1996).

@CODE:OF
@CODE: MO
    . RATE:       3.51% of the wage base, generally (1996 rate)

    . WAGE BASE:  The first $8,500 of wages per employee
                  (for 1996).

@CODE:OF
@CODE: HI
    . RATE:       3.0% of the wage base (1996 rate)
                  (Plus a 0.05% employment training tax)

    . WAGE BASE:  The first $25,800 of wages per employee
                  (for 1996).

@CODE:OF
@CODE: CA
    . RATE:       3.4% of the wage base (1996 rate)
                  (Plus 0.1 employment training tax,
                  usually)

    . WAGE BASE:  The first $7,000 of wages per employee
                  (for 1996)

@CODE:OF
@CODE: AZ FL IN MS SC GA NH TN
    . RATE:       2.7% of the wage base (1996 rate).

@CODE:OF
@CODE: NY
    . RATE:       4.4% of the wage base (1997 rate).  This
                  consists of a 2.7% "normal rate," a 0.7%
                  supplemental tax, and the 1.0% subsidiary
                  tax (which is not credited to the
                  employer's account).

    . WAGE BASE:  The first $7,000 of wages per employee
                  (for 1997).

@CODE:OF
@CODE: MA
    . RATE:       3.0% of the wage base (1996 rate).

@CODE:OF
@CODE: AZ FL IN MS SC TN
    . WAGE BASE:  The first $7,000 of wages per employee
                  (for 1996).

@CODE:OF
@CODE: NH
    . WAGE BASE:  The first $8,000 of wages per employee
                  (for 1996).

@CODE:OF
@CODE: GA
    . WAGE BASE:  The first $8,500 of wages per employee
                  (for 1996).

@CODE:OF
@CODE: NM
    . RATE:       2.7% of the wage base (1996 rate).

    . WAGE BASE:  The first $13,900 of wages per employee
                  (for 1996).

@CODE:OF
@CODE: TX
    . RATE:       2.7% of the wage base (1996 rate).

    . WAGE BASE:  The first $9,000 of wages per employee
                  (for 1996).

@CODE:OF
@CODE: MA
    . WAGE BASE:  The first $10,800 of wages per employee
                  (for 1996).

@CODE:OF
@CODE: AR
    . RATE:       3.3% (1996 rate).

    . WAGE BASE:  The first $9,000 of wages (for 1996).

@CODE:OF
@CODE: CT
    . RATE:       5.1% (1996 rate).

    . WAGE BASE:  The first $11,000 of wages (for 1996).

@CODE:OF
@CODE: ID
    . RATE:       2.5% (1996 rate).

    . WAGE BASE:  The first $21,600 of wages (for 1996).

@CODE:OF
@CODE: IA
    . RATE:       1.0% 1997 rate (7.0% for construction)
                  (Plus 0.05% surcharge for all employers)

    . WAGE BASE:  The first $15,200 of wages (for 1997)

@CODE:OF
@CODE: KY
    . RATE:       3.0%, except for construction (1996 rate).

    . WAGE BASE:  The first $8,000 of wages (for 1996).

@CODE:OF
@CODE: LA
    . RATE:       (Rate varies by indust