The IRS has announced that Michigan, Indiana and South Carolina will be credit reduction states for 2010 FUTA Tax Returns. To companies with employees in these states this means that you’ll owe additional FUTA Tax beyond the 0.8% of the first $7000.00 in wages paid to each employee. In South Carlina and Indiana, it means that you’ll owe an extra 0.3% and in Michigan would owe an extra 0.6%! For Michigan employers, that totals $42.00 per employee that earned at least $7000.00 in 2010.
Business owners in these states will want to make sure that Schedule A is attached to their IRS Form 940 in these states. Failing to comply may cost your company penalties and interest in addition to the extra tax. Don’t pay any more than you have to!