Year-End Indiana Payroll Update
December 06, 2013

Higher FUTA Rates
The U.S. Department of Labor has announced employers in Indiana will pay a higher federal unemployment (FUTA) rate for 2013. Indiana is on the list of states that have not paid back outstanding Federal Unemployment Insurance loans.

The credit reduction for Indiana will be 1.2% on the first $7,000 of wages paid to each employee. The maximum additional amount due as a result of the credit reduction will be $84 per employee who earned at least $7,000 in wages. Indiana is paying the highest credit reduction rate in the nation due to their failure to repay outstanding federal loans for five consecutive years. The credit reduction will continue to rise by 0.3% for each additional year the loans remain unpaid.

When preparing the Employer's Annual FUTA Tax Return, Form 940, employers will need to complete Schedule A to compute the credit reduction amount.

Indiana Electronic Filing Mandate for Employers
Indiana recently mandated all employers who file informational returns to file them electronically via INtax or one of the Department's approved file upload processes. Informational returns include forms W-2 and WH-18. These informational returns must be accompanied by Indiana Form WH-3.