North Carolina’s governor, Pat McCrory, has announced that North Carolina has paid off its federal unemployment insurance debt. As a result, North Carolina will not be a federal credit reduction state in the 2015 tax year. North Carolina employers will pay federal unemployment tax (FUTA) on their 2015 federal Form 940 at the same tax rate as employers who are not in credit reduction states (i.e., 0.6%). The FUTA tax rate on their 2014 federal Form 940 was 1.2% higher than employers who were not in credit reduction states. (Source: North Carolina Office of Governor Press Release, “North Carolina Pays off Unemployment Debt to Federal Government”, 5/5/15.)
This is exciting news for North Carolina employers! Savers Admin payroll clients who have questions about how this announcement may affect their federal unemployment tax rate are asked to contact their payroll processor for assistance.