Published July 5, 2011
South Carolina businesses might see a reduction in what they pay for the Federal Unemployment Tax Act liability because the federal government will not extend a 0.2 percentage point surcharge, the S.C. Department of Employment and Workforce announced.
The FUTA decreased July 1 from 0.8% to 0.6% on the first $7,000 of each employee’s wages. This could mean $55 million in savings for S.C. businesses, S.C. DEW said.
The FUTA rate on most businesses in 2010 had actually increased from 0.8% to 1.1% to help the state start paying back the federal loans it had received, the agency said. The 2011 rate is estimated to go from 1.1% to 0.6%, almost a 50% savings and a reduction of $35 per employee which also equals a $55 million savings for South Carolina businesses.
The changes should allow the S.C. Department of Employment and Workforce to avoid any more borrowing this year while making voluntary payments.
“As a result of the federal government dropping the surcharge in addition to recent legislation
passed regarding State Unemployment Insurance Tax rates, our state’s businesses will see significant savings in what they pay in taxes at both the federal and state levels,” said DEW Executive Director John Finan.