The relationship of New York State and federal UI reporting

The annual total New York State wages reportable for FUTA purposes on Form 940 should be reconciled to the wages subject to contribution reported to the Unemployment Insurance Division for the year on Form NYS‑45 (the total of wages reported each quarter on line 3 of Form NYS-45). Employers should take time to review these figures and resolve any discrepancies before submitting the federal reports that are due January 31 each year. This will help ensure that proper credit is applied to the FUTA amount due and may prevent future questions resulting from any apparent discrepancy between the amount of wages subject to contribution reported to each agency for the year.

An employer subject to the FUTA will obtain a 5.4% (0.054) credit against the federal amount due if the state contributions are paid in full by January 31 following the close of the reporting year. If the state contributions are paid after January 31, the credit is limited to 90% (0.9) of the amount that would have been allowable as a credit had the state contributions been paid on time. Moreover, unless the state contributions are paid, no credit may be taken against the federal amount due on Form 940.

It should be noted that if any state has borrowed federal funds in order to pay its benefits, the amount of the allowable credit may be subject to reduction. Federal Form 940 will indicate if New York State is a credit reduction state.

Note: Re‑employment service fund amounts paid may not be used to claim a credit against federal unemployment amounts due.