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Level 1

FUTA Exemption or not

I do the books for my wife's LLC she just established in September 2019. It is taxed as an S-corp, she is the sole owner but also pays herself as an employee. She is the ONLY employee and owner and has been determined to be exempt from paying SUI in Iowa. How does her situation affect her requirement to pay FUTA or not? Can she be completely exempt or still has to pay?

3 Comments
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Moderator

FUTA Exemption or not

@scottpenisten Great question, to get an answer you would need to speak to an agent from the IRS department. They will be able to give you information on FUTA exemption requirements.  If your business tax status changes please let your payroll service know in order to update tax settings.

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Level 1

FUTA Exemption or not

If I am using QB for payroll how do I go back to change my liability status for FUTA if I have accidentally selected the wrong choice?

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QuickBooks Team

FUTA Exemption or not

I'll help with your payroll question, acuteangla0809.

 

Can you tell us if an employee is exempted for FUTA? Follow these steps to change the settings in the employee's profile:

 

  1. Go to the Workers menu and select Employees.
  2. Click the name of the employee.
  3. Proceed to the What are (employee name) withholdings? section and click the Pencil icon underneath it.
  4. Scroll-down to the Tax exemptions section and click on it.
  5. Uncheck the box for FUTA and select a reason why the employee is exempted to this tax.
  6. Click Done.

You can also check out this article in case you also need to change the state unemployment tax rate in the future: How to update State Unemployment Insurance rate.

 

I'll be around if you have other payroll questions. 

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