Many states have FUTA credit reduction this year so you may notice a jump in FUTA that seems to come out of nowhere. If clients have any questions about this you can refer to the information below. Also, line 11 on the 940 calculates the amount of the credit reduction. This reduction amount is broken down on schedule A, which is towards the end of the 940.
Here's what Wikipedia says:
As of November 11, 2011, there are 21 states that had outstanding UI federal loans and as a result, employers in these states will pay extra FUTA taxes that are effective retroactively to January 1, 2011:
Arkansas 0.3%
California 0.3%
Connecticut 0.3%
Florida 0.3%
Georgia 0.3%
Illinois 0.3%
Indiana 0.6%
Kentucky 0.3%
Michigan 0.9%
Minnesota 0.3%
Missouri 0.3%
North Carolina 0.3%
New Jersey 0.3%
Nevada 0.3%
New York 0.3%
Ohio 0.3%
Pennsylvania 0.3%
Rhode Island 0.3%
Virginia 0.3%
Virgin Islands 0.3%
Wisconsin 0.3%
