# FUTA credit reduction

> FUTA credit reduction — 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%.

Source: https://lopifi.com/glossary/futa-credit-reduction
Part of: Lopifi — US GAAP books on autopilot, reviewed by a CPA (https://lopifi.com)

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**What is 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%.

## Words this system refuses for it

- SUTA increase

- **Category:** Tax
- **Specified in:** [Lexicon](https://lopifi.com/md/docs/domain/11-lexicon)
- **Related:** credit, futa