Virgin Islands Faces FUTA Credit Reduction for 2019
According to the U.S. Department of Labor (DOL), the U.S. Virgin Islands could not pay its federal loans by the November 10, 2019, deadline and will lose the full Federal Unemployment Tax Act (FUTA) credit for 2019. It will have a credit reduction of 2.7% for 2019 [DOL, Final 2019 Federal Unemployment Tax Act (FUTA) Credit Reductions, rev. 11-12-19]. The U.S. Virgin Islands was also subject to a FUTA credit reduction for 2018.
The additional FUTA tax must be deposited by the due date of the 2019 federal Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, which is due January 31, 2020. The 2019 Schedule A (Form 940) will contain the official list of credit reduction states/territories, and the credit reduction total from Schedule A is reported on Form 940. Both forms will be available from the IRS when they are finalized.
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Lia Coniglio, Esq., is Managing Editor of PayState Update and Manager of State Payroll Information Resources for the APA