Federal Unemployment Tax Act

Most private employers covered by the UI program in Iowa are subject to the Federal Unemployment Tax Act (FUTA)​. Employers can receive a maximum credit equal to 5.4 percent against this tax if they are participating in a state UI program meeting federal requirements.

The current FUTA tax is scheduled to be 6.0 percent on the first $7,000.00 of wages paid to employees. Due to the ongoing solvency of the UI Trust Fund, the 5.4 percent credit is applied to all accounts, making the tax rate 0.6 percent on the first $7,000.00 of wages paid to employees.

For Federal 940 Certification purposes, the State Experience Rate indicated on the tax rate notice is the State Experience rate as defined on the federal form 940.

Additional information regarding FUTA may be found by visiting the Internal Revenue Service (IRS) FUTA website .

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