© 2024 American Payroll Institute, Inc.
July 12, 2024 Volume 32 Issue 7
Three States, Virgin Islands Face Credit Reduction for 2024
The U.S. Department of Labor (DOL) updated the
balances on outstanding loans from state/territory
Federal Unemployment Accounts (FUAs). As of July 9, 2024,
California, Connecticut, New York, and the Virgin Islands
have an outstanding FUA loan balance.
Outstanding loans
If states have an outstanding FUA loan on January 1 of
at least two consecutive years and on November 10 of the
second year, they are subject to a credit reduction on their
Federal Unemployment Tax rate until the loan has been paid
off. Each year a state has an outstanding loan balance on
January 1, the credit reduction increases by 0.3%. However,
states that have made an effort to keep their balances in
check have some opportunities to avoid the reduction (see
The Payroll Source®, §7.1-6).
Current balances are: California – $19,314,001,418.53
Connecticut – $14,126,579.00 and New York –
$6,065,222,318.70.
Employers in California and New York may be subject
to an additional FUTA credit reduction for 2024 because
the states began borrowing in 2021 and had outstanding
FUA loan balances on January 1, 2022, January 1, 2023, and
January 1, 2024. If these states do not repay the outstanding
loans by November 10 of this year, they will be subject to an
increased credit reduction of 0.9%. The additional FUTA tax
would be due on January 31, 2025.
Since last reported in PAYROLL CURRENTLY, Connecticut
paid off its loan balance and started borrowing again. If
Connecticut does not pay off the new loan balance by
November 10, 2024, it will be subject to a potential credit
reduction of 0.9%, even though it was not subject to a credit
reduction for 2023.
Virgin Islands likely to face reduction again
The Virgin Islands began borrowing in August 2009, has
a current outstanding balance of $80,193,938.21, and might
be subject to a FUTA credit reduction of 5.1% for 2024. The
potential credit reduction of 5.1% includes a basic reduction
of 4.2% and Benefit Cost Rate (BCR) add-on of 0.9% (which
has been waived in past years). The Virgin Islands was
subject to a credit reduction of 3.9% for 2023 (see PAYROLL
CURRENTLY, Issue 12, Vol. 31).
Draft 940, Schedule A released
In May, the IRS released early release drafts of the 2024
Form 940, Employer’s Annual Federal Unemployment (FUTA)
Tax Return, and Schedule A, Multi-State Employer and Credit
Reduction Information, with no substantial changes from
the 2023 versions. Businesses should not file draft forms or
rely on draft publications or instructions.
The 2024 Schedule A will contain the official list of credit
reduction states and their rates, and the credit reduction
total from Schedule A will be reported on Form 940.
Three States, Virgin Islands Face Credit Reduction for 2024. ......1
District Court Grants Injunction to Block DOL Rule for DBRA....2
ETAAC Presents 2024 Annual Report to Congress....................2
IRS Will Deny High-Risk ERC Claims, Begin Work on Others. ...3
E-Verify Updates Website, Will Change Account Login...........3
IRS Provides Guidance on Retirement Plan Distribution
Exceptions.....................................................................................3
Court Blocks DOL Salary Increases for State of Texas
Workers. ........................................................................................4
IRS Answers FAQs on Educational Assistance Programs........5
Payroll Solutions. .............................................................................6
IRS Issues Letter on How to Handle Pandemic QTFs................6
IRS Updates Strategic Operating Plan........................................6
PayrollOrg Updates Electronic Payments Guide......................7
IRS Revises Golden Parachute Payments Guide. ......................7
6th Circuit Reverses District Court Ruling in ‘Belo Plan’ Case...7
DOJ Signs Agreement With Agency to Resolve
Discrimination Issues.................................................................8
FedNow Resource Highlights Benefits of Instant Payments
for Payroll......................................................................................8
OCSS Highlights Importance of Employers to Child Support. ...9
TIGTA Alerts IRS to COVID-19 Fraud Scheme................................... 9
CBCA Denies Request for Price Adjustment in GSA Contract...... 10
Wage and Hour Roundup....................................................................11
Special Report: Conversations With Census, DOL, and OCSS –
Part 2. ....................................................................................................12
State and Local Highlights............................................................. 16
PAYO Comments on Fedwire, NSS Proposal........................... 18
PAYO Raises Concerns About Delaware Paid Family
Leave........................................................................................... 19
July 12, 2024 Volume 32 Issue 7
Three States, Virgin Islands Face Credit Reduction for 2024
The U.S. Department of Labor (DOL) updated the
balances on outstanding loans from state/territory
Federal Unemployment Accounts (FUAs). As of July 9, 2024,
California, Connecticut, New York, and the Virgin Islands
have an outstanding FUA loan balance.
Outstanding loans
If states have an outstanding FUA loan on January 1 of
at least two consecutive years and on November 10 of the
second year, they are subject to a credit reduction on their
Federal Unemployment Tax rate until the loan has been paid
off. Each year a state has an outstanding loan balance on
January 1, the credit reduction increases by 0.3%. However,
states that have made an effort to keep their balances in
check have some opportunities to avoid the reduction (see
The Payroll Source®, §7.1-6).
Current balances are: California – $19,314,001,418.53
Connecticut – $14,126,579.00 and New York –
$6,065,222,318.70.
Employers in California and New York may be subject
to an additional FUTA credit reduction for 2024 because
the states began borrowing in 2021 and had outstanding
FUA loan balances on January 1, 2022, January 1, 2023, and
January 1, 2024. If these states do not repay the outstanding
loans by November 10 of this year, they will be subject to an
increased credit reduction of 0.9%. The additional FUTA tax
would be due on January 31, 2025.
Since last reported in PAYROLL CURRENTLY, Connecticut
paid off its loan balance and started borrowing again. If
Connecticut does not pay off the new loan balance by
November 10, 2024, it will be subject to a potential credit
reduction of 0.9%, even though it was not subject to a credit
reduction for 2023.
Virgin Islands likely to face reduction again
The Virgin Islands began borrowing in August 2009, has
a current outstanding balance of $80,193,938.21, and might
be subject to a FUTA credit reduction of 5.1% for 2024. The
potential credit reduction of 5.1% includes a basic reduction
of 4.2% and Benefit Cost Rate (BCR) add-on of 0.9% (which
has been waived in past years). The Virgin Islands was
subject to a credit reduction of 3.9% for 2023 (see PAYROLL
CURRENTLY, Issue 12, Vol. 31).
Draft 940, Schedule A released
In May, the IRS released early release drafts of the 2024
Form 940, Employer’s Annual Federal Unemployment (FUTA)
Tax Return, and Schedule A, Multi-State Employer and Credit
Reduction Information, with no substantial changes from
the 2023 versions. Businesses should not file draft forms or
rely on draft publications or instructions.
The 2024 Schedule A will contain the official list of credit
reduction states and their rates, and the credit reduction
total from Schedule A will be reported on Form 940.
Three States, Virgin Islands Face Credit Reduction for 2024. ......1
District Court Grants Injunction to Block DOL Rule for DBRA....2
ETAAC Presents 2024 Annual Report to Congress....................2
IRS Will Deny High-Risk ERC Claims, Begin Work on Others. ...3
E-Verify Updates Website, Will Change Account Login...........3
IRS Provides Guidance on Retirement Plan Distribution
Exceptions.....................................................................................3
Court Blocks DOL Salary Increases for State of Texas
Workers. ........................................................................................4
IRS Answers FAQs on Educational Assistance Programs........5
Payroll Solutions. .............................................................................6
IRS Issues Letter on How to Handle Pandemic QTFs................6
IRS Updates Strategic Operating Plan........................................6
PayrollOrg Updates Electronic Payments Guide......................7
IRS Revises Golden Parachute Payments Guide. ......................7
6th Circuit Reverses District Court Ruling in ‘Belo Plan’ Case...7
DOJ Signs Agreement With Agency to Resolve
Discrimination Issues.................................................................8
FedNow Resource Highlights Benefits of Instant Payments
for Payroll......................................................................................8
OCSS Highlights Importance of Employers to Child Support. ...9
TIGTA Alerts IRS to COVID-19 Fraud Scheme................................... 9
CBCA Denies Request for Price Adjustment in GSA Contract...... 10
Wage and Hour Roundup....................................................................11
Special Report: Conversations With Census, DOL, and OCSS –
Part 2. ....................................................................................................12
State and Local Highlights............................................................. 16
PAYO Comments on Fedwire, NSS Proposal........................... 18
PAYO Raises Concerns About Delaware Paid Family
Leave........................................................................................... 19
