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Distribution Codes

Federal Taxes Tabs

Payroll Checklists

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Federal Taxes - FUTA Taxes Tab

Access this tab using Maintain>Payroll>Federal Taxes.

Use this tab to edit the employer paid federal unemployment tax information. The system defaults to the current federal values for Maximum Annual Subject Wages and Percent of Wages.

 

FUTA Tax: Select the override check box, then enter changes to the Maximum Annual Subject Wages and Percent of Wages for the FUTA Tax. The system displays the current and past year's official federal withholding tax values.

  • Override Official Values: Select this check box to enable the Maximum Annual Subject Wages and Percent of Wages fields, so that you can manually enter the wage information for these fields.
  • Maximum Annual Subject Wages: Accept the default or enter the maximum subject wages for the Federal Unemployment tax.
  • Percent of Wages: Accept the default or enter the percentage of maximum subject wages for the Federal Unemployment tax. This percent cannot be less then the lowest FUTA Credit Rate entered for any State in the system, using Maintain>Payroll>State Taxes>Tax tab.

2025 Official Values: The values displayed in these fields are the official federal rates for the current year. Displayed are the Maximum Annual Subject Wages and Percent of Wages for the FUTA tax.

2024 Official Values: The values displayed in these fields are the official federal rates for the past year. Displayed are the Maximum Annual Subject Wages and Percent of Wages for the FUTA tax.

  • Click Distribution Codes Information to open the Maintain>Payroll>Distribution Codes form, where you can create or modify a distribution code. Each time this button is selected, a new Distribution Codes form is opened.
  • If the override check box is un-checked after you made changes to the Maximum Annual Subject Wages or Percent of Wages fields, the system returns to the default current year official values.
  • The FUTA rate is based on the existence of SUTA. When state tax information was set up (Maintain>Payroll>State Taxes), if the State Unemployment Tax check box (on the State tab) was not selected, or if the SUTA Percentage of Wages was 0% (on the Tax tab), the amount of FUTA calculated for the state will be 6.0%. Otherwise, FUTA will be calculated at .6%.
  • The calculation of federal tax FIT and MC are provided by the system; the official values for FUTA, FICA, and SS are also provided but can be manually maintained if mid-year adjustments occur before a normal software update. The earning, benefit, and deduction amounts that are flagged as subject to the specified federal tax are used in the calculation of the tax.