02 February 2017 FUTA credit reduction projected for two jurisdictions in 2017 The US Department of Labor (DOL) has released its preliminary projections of the states and territories that have the potential for a federal unemployment insurance (FUTA) credit reduction for calendar year 2017. The Department's projections include the standard credit reduction and estimated Benefit Cost Rate (BCR) percentages for 2017. As it was on December 31, 2016, the DOL projects that employers of California and the Virgin Islands will again be subject to the FUTA credit reduction in 2017, resulting in higher FUTA taxes in 2017 as compared to 2016. It is anticipated that these early rate projections could change over the next several months. (Potential 2017 Federal Unemployment Tax Act (FUTA) Credit Reductions, US Department of Labor, Employment and Training Administration, January 30, 2017.) California and the Virgin Islands, which have carried a federal UI loan balance since 2009, are again faced with both the standard FUTA credit reduction and the BCR add on for 2017. Jurisdictions can request a waiver of the BCR no later than July 1, 2017. For the past three years, both California and the Virgin Islands requested and received a waiver of the BCR add on. The US Department of Labor projections of the standard FUTA credit reduction and BCR add-on rate is shown in the chart on the following page. For more information about the FUTA credit reduction see the EY Guide to Unemployment Insurance. For the FUTA credit reduction states in 2016, see our rates and limits facts.
Document ID: 2017-0229 | ||||||||||||||
