TaxBandits Knowledge Base

Do the employers from California have credit reductions for the 2023 tax year?

The U.S. Department of Labor (DOL) has released a list of states that may face a reduction in FUTA credit for 2024. As of 2023, California, Connecticut, Illinois, and New York already have a credit reduction of 0.6%, and there is a possibility of a further credit decrease of 0.6% in 2024. The credit reduction rate for the U.S. Virgin Islands is 3.9%.

For the tax year 2024, California and New York will have a credit reduction rate of 0.9%. Similarly, the U.S. Virgin Islands will face a credit reduction rate of 4.2%.