Received a note about Additional Federal Unemployment Tax for Credit Reduction States - do i need to amend tax return and if so, how?

Hi there, Tarassian. Yes, you need to amend your tax return depending on the note about the Additional Federal Unemployment Tax Credit Reduction States. Let me elaborate on it further for your guidance.

Employers in states designated as credit reduction states may face higher FUTA taxes each year, requiring them to pay an additional percentage for that tax year. 

If the FUTA credit reduction impacts your tax filings, you’ll need to check if the additional FUTA tax was already accounted for in your original tax filings. If it wasn’t, an amendment is likely required. Confirm whether this applies to the tax returns you've filed for the affected tax year.

To adjust FUTA tax, you need to file an amended Form 940. QuickBooks Online Payroll can assist you in generating the corrected form if necessary. You’ll need to include the new credit reduction rates in your calculations.

Here's how:

1. Navigate to the Payroll section and select Payroll Tax.
2. Review and adjust your Federal Tax Liability for FUTA with the updated rates for credit reduction states.
3. If your QuickBooks Online Payroll automatically handles tax payments, you'll want to consult the payroll reports to ensure the correct calculations.

For more information, refer to this article: Request an amendment for payroll.

I’ll ensure this conversation remains open for any future updates and discussions.