NO 2018 FUTA CREDIT REDUCTION FOR CALIFORNIA
It's official, California repaid it's Title XII loan to the Federal Government and there was no outstanding balance as of November 10, 2018.
This means California employers will not be subject to an additional 2.4% on the first $7000 in wages per employee in 2018.
This is huge because for the past 5 years California employers have had to come up with additional funds (often unbudgeted) in December and January to pay the additional tax. If California had not paid off it's loan this year, it would have meant up to an additional $168 per employee due on January 31, 2019.
You can now tell your clients or your employer to start spending the cash they've tucked away for a rainy day on all the employees !
Unfortunately, the U.S. Virgin Islands did not pay their loan back and are a credit reduction state for 2018 at 2.4%. Look for the IRS to now release the final version of the 2018 Form 940 Schedule A in the coming weeks.