Do the Employers from California have Credit Reductions for the 2023 tax year?
194 views | Last modified 11/15/2023 12:32:30 AM EST | Added by TaxBandits Team

The U.S. Department of Labor (DOL) has released a list of states that may face a reduction in FUTA credit for 2023. As of 2022, California, Connecticut, Illinois, and New York already have a credit reduction of 0.3%, and there is a possibility of a further credit decrease of 0.6% for 2023. The U.S. Virgin Islands could potentially see a significant reduction in credit. However, the final decision will be made after November 10, 2023.

The IRS has also released the draft of Form 940 for the tax year 2023, which reveals that California, Connecticut, Illinois, and New York will face a credit reduction rate of 0.006 (0.6%). Similarly, the U.S. Virgin Islands will face a credit reduction rate of 0.039 (3.9%).