California, Virgin Islands Get 2025 FUTA Credit Reduction

Employers in California and the U.S. Virgin Islands will have higher unemployment tax costs for 2025 because of a Federal Unemployment Tax Act credit reduction, the federal Labor Department said Nov. 10.

For 2025, California will be assessed a general FUTA credit reduction of 1.2% on wages paid to employees for work attributed to either of these states, the department announced. The reduction will cause employers to pay an effective federal unemployment tax rate of 1.8%, or up to $126 for each employee when applied to the federal unemployment-taxable wage base of $7,000.

This is the fourth consecutive year ...