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Employment Taxes

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Federal Unemployment Tax Act (FUTA) 

Normally the tax rate is 0.8% (6.2% - 5.4% credit) on all employees who participate in the state unemployment. For those individuals who elect out of the state unemployment (e.g., officers of the corporation) the rate is 6.2%. The rate is applied to the first $7,000 of wages each year. 

This is a tax on the employer and should be deposited by the last day of the first month after the quarter ends. They want their money whenever it has accumulated to more than $100. Charitable or 501(c)(3) organizations are  exempt under IRC 501(a).

Per IRS Publication 15-A generally benefits received under a Cafeteria Plan are not subject to Social Security, Medicare, and FUTA taxes, or income tax withholding. 

Form 940 or 940-EZ is due by January 31st for the preceding year.

 

 
Federal Social Security, Medicare, and Income Tax Withholding

Generally speaking, employers should deposit money withheld from employees paychecks by the 15th of the month following when the wages were earned. Depending on the amount of payroll taxes, a more frequent deposit may be required. 

Form 941 is due by the end of the month following the quarter end. Generally, no money is due with this form, since the dollars should have already been deposited. 

Electronic Funds Transfer Payment System (EFTPS) - Click this link and you go to the steps I followed to get setup to pay the employment taxes via the internet. 

New IRS tax calculator at IRS tax site.

 

 
Washington State - Department of Labor & Industries

In general, L&I is paid quarterly. It is due by the end of month following each calendar quarter. The rate varies with industry and company. A Master Application must be completed if a sole proprietor or small business corporation is adding an employee in order to notify L&I that the business is now responsible for L&I tax. 

 

 
Washington State - Employment  Division

Similar to L&I the state unemployment is calculated quarterly. The form and any tax due must be paid by the month following the quarter the wages were earned. And like L&I, the Master Application must be completed when the first employee is added. 

 

 

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Last modified: February 09, 2003