Tax

Federal Unemployment Tax Act (FUTA) Updates for 2025

With the mass unemployment that resulted from the COVID-19 pandemic, many states had to borrow from the Federal government in order to pay unemployment benefits. As a result, a few states currently have outstanding loans to the government that will result in higher FUTA taxes being paid by employers in those states in 2025.

For budgeting purposes, you should assume a .6% FUTA rate on the first $7,000 in wages for all states with an additional percentage to be charged to cover the FUTA Credit Reduction (FCR) in certain states.

The FCR and FUTA rates that will be charged for 2025 are listed below.

State	FCR Rate	FUTA + FCR Rate
California	1.2%	1.8%
New York	1.2%	1.8%
Virgin Islands	4.5%	5.1%

The previous rates from 2024 are listed below.

State	FCR Rate	FUTA + FCR Rate
California	0.90%	1.50%
New York	0.90%	1.50%
Virgin Islands	4.20%	4.80%

Learn more about FUTA credit reductions.

Last updated 11.22.24. This information in this communication is general in nature, and is not intended, nor should it be construed, as legal, accounting, tax or other professional advice rendered by GreenSlate, LLC. The reader should contact his or her attorney, CPA, or tax professional prior to taking any action based upon this information.

Topics: Tax Budgeting

Updated November 22, 2024