If employer does not pay state unemp taxes for 7 years can the feds go back and increase the futa tax to 6.2%?

Question

if an empoyer had been paying .8 percent all along thinking they were paying all state unemployment taxes?

Well I went back to the records and the company has been paying a rate of .008 since 2001.

An employee was never and still hasn't been registered in the State of Nevada, therefore no state unemployment taxes were or have been paid?

Answer 1

The employer should already be paying 6.2%. They only receive a credit of 5.4% at the end of the year, when they pay their 6.2% FUTA tax in full and on time.

If the employer is only paying .8% initially, then they may eventually get audited.

Answer 2

The federal tax is 6.2% of taxable wages minus a credit of 5.4% if the state tax paid on time. When the employer files a Federal Unemployment Tax Return claiming to have paid the state, IRS cross checks using the state tax ID number that has to be on the federal return and, if full payment of state tax has not been made, issues a bill for the difference. If the state tax is paid late, the credit is reduced by 10% of the delinquently paid state tax. I can't imagine an employer filing federal returns for seven years and not getting an additional tax adjustment.

Answer 3

Sure.

Ignorance is no exception. The FUTA credit is only available if all of the SUTA has been paid on time. The facts are that it wasn't paid on time. That the employer thought it was is irrelevant.

If "thinking" that something was happening that wasn't was OK, I would tell the IRS that they should give me credit for the $5000 in estimated payments that I though I was making each quarter.