If you are a business located in one of the Credit Reduction states (New York, New Jersey, Connecticut and Rhode Island are included) and also paid unemployment taxes this year, listen up. This applies to you!
As you may have already figured out, the federal government’s recent decision to extend payment of unemployment benefits will affect the tax credit you earn for paying unemployment taxes. More specifically, it will shrink that tax credit — meaning you actually have to pay more.
This is because New York, New Jersey, Connecticut and Rhode Island are among the 20 states who have not repaid the money they borrowed from the federal government to these extended benefits.
So, when it’s finally time, here’s what you need to know.
Your “credit reduction” (a.k.a. the reason you have to PAY MORE) is calculated on Schedule A of the 2011 Form 940, the Employer’s Annual Federal Unemployment (FUTA) Tax Return.
For those filing through QuickBooks®, here’s something you’ll be relieved to hear. QuickBooks® DOES take this credit reduction into account and provides you with correct amount due, but it DOES NOT record an increase to your payroll liability account automatically.
Thankfully, we’ve found an article that shows you how you can this yourself, step-by-step. Click here to read it!
If you would like advanced QuickBooks® training in order to quickly file your own business taxes this year, Beaton Accounting can help. Our QuickBooks® ProAdvisors® are software gurus, and they can help you become one too.
If you’d like to take an even easier route, Beaton Accounting can file all of your business and corporate tax returns on your behalf! All of our tax preparers are experienced tax professionals to ensure the accuracy of your return.
Call us today for a FREE consultation if interested!
631-921-6894
Have a question or certain topic you’d like to see addressed in our next blog post? Just leave a comment, or email us at info@beatonaccounting.com.