We all know that professional athletes make obscene amounts of money for basically playing a game. Their salaries even get an extra boost from signing bonuses, performance incentives, and personal appearance fees. Savvy sports agents have become pro’s in their own right by insuring that the athletes they represent rake in some pretty incredible profits. Couple that with some not-so-savvy sports organizations and you get the perfect storm to brew up some very interesting, and weird, clauses in sports contracts. Check out this list of weird clauses in sports contracts and the athletes who are making the big bucks from them.
The federal government has recently announced that employers in 14 states will face increased FUTA taxes in 2013. The tax increase for these states is a result of outstanding loans of more than two years with the federal government to pay state unemployment benefits. This tax increase (called a “Credit Reduction”) will result in additional FUTA tax for employees working in each effected state. The total FUTA Credit Reduction/Rate Increase for 2013 will range between 0.6% to 1.2%, depending on the number of years these loans have been outstanding. As an example, the state of CA currently has an outstanding loan balance of $9.2 Billion. This tax increase is used, in part, to retire this outstanding debt.
The states impacted along with the rate increases are listed below:
0.6% Rate Increase
0.9% Rate Increase
AR, CA, CT, GA, KY, MO, NY, NC, OH, RI, WI
1.2% Rate Increase
For employers operating in DE, the 0.6% credit reduction may increaseyour FUTA tax by as much as $42/employee. For employers in a state with a .9% credit reduction, the FUTA tax can increase by $63/employee. The 1.2% credit reduction can increase taxes by $84/employee. Remember that the increase in FUTA only relates to the first $7,000 in wages paid to employees in the states impacted. FUTA taxes for employees working in other states will not be effected.
As year-end tax reports become available, Streamline Payroll will review FUTA tax returns for all client’s with employees located in the states subject to this tax increase. Refer to your 4th Qtr 2013 Tax Package for the additional amount of FUTA taxes due. It will be shown on the Reconciliation Recap report, beginning on page 3. Also, Form 940 page 3 will show the detailed breakdown of wages and additional taxes for each state. The additional FUTA taxes will be paid with the 4th Qtr FUTA payment on January 31st, 2014.
If you have any questions, please do not hesitate to contact our office. We will be happy to answer any questions you have regarding this issue.
Streamline Payroll, LLC
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