2024 Final FUTA Credit Reduction States Published

At A Glance

• The US Department of Labor (DOL) has announced the final 2024 FUTA credit reduction states.
• The credit reduction states/territories are California, New York, and the Virgin Islands (USVI).

Final 2024 FUTA Credit Reduction States

Four states and territories faced a potential FUTA credit reduction in 2024: California, Connecticut, New York, and the Virgin Islands.

• Connecticut repaid their outstanding advances before November 10, 2024, avoiding a FUTA credit reduction.
• California and New York had outstanding advances on each January 1 for 2021 through 2024 and did not repay their advances before November 10, 2024. Therefore, employers in these states face a 0.9% credit reduction.
• The US Virgin Islands (USVI) had an outstanding advance on each January 1 from 2010 through 2024 and did not repay the advances before November 10, 2024. Therefore, employers in the USVI face a 4.2% credit reduction.

Next Steps

Paylocity will apply this update to all applicable 2024 Forms 940. 

To review the full scope of the DOL announcement, visit FUTA Credit Reductions, US Dept of Labor.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change, and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney, or Advisor.