FUTA credit reduction
In accounting, FUTA credit reduction means the cut to the 5.4% state credit against FUTA for employers in a state that has carried a federal unemployment loan for two consecutive 1 January balances and not repaid it by 10 November — 0.3 points, growing each further year. For 2025: California 1.2%, US Virgin Islands 4.5%.
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- Lexicon
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Authority
This definition follows US DOL — FUTA credit reductions.
Every citation in this system, with the text we read and the date we checked it, is in US GAAP and where these rules come from.
What it is not called
Each of these is a real word for a different thing. Using it here is what makes a product read as though it was built by someone who has not done the work.
- SUTA increase
Nearby in the catalog
No component names this concept outright. These are the ones in its part of the system, which is a weaker claim — but a component nothing links to is a component nobody finds.
Terms this one depends on
- CreditThe right column. It increases liabilities, equity and revenue, and decreases assets and expenses.
- FUTAThe federal unemployment tax an employer pays — 6.0% of the first $7,000 of each employee's wages, reduced to a net 0.6% by the state credit unless the state is a credit-reduction state; filed on Form 940
Also in Tax
Defined in Lexicon. This page is generated from that document, so the two cannot disagree.