Reduced burden for 4 million small businesses

Effective January 1, 2005, the minimum threshold for Federal Unemployment Tax Act (FUTA) quarterly deposits is increased from $100 to $500. The $100 minimum deposit threshold was established in 1970.

Under normal circumstances, the maximum amount the IRS collects from employers per employee is $56 per year. As a result, most employers with two or more employees make at least one federal tax deposit per year. Setting the threshold at $500 will mean that employers with eight employees or less will no longer have to make up to four FUTA tax deposits yearly.

The change will affect 4 million small businesses.

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...back to 2 December 2004

Further information:
www.irs.gov/newsroom/article/0,,id=131682,00.html
www.irs.gov/pub/irs-utl/td9162.pdf