Understanding the FUTA Credit Reduction Computations

1 Credits: Taxes


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Understanding the FUTA Credit Reduction Computations

Course Level
CPE Credits

1 Credits: Taxes

Course Description

This presentation James C. Count II (CPA, CTFA) will take you through using the FUTA credit formula to understand what may happen for your state in regard to a loan from the Department of Labor for paying employee benefits to your state workers. There are three formulas, and this class will take you through each of them, how to use them, and how they come into play.  You can follow along using your numbers for your state, but this class will use California numbers to demonstrate the formulas and as a general example on how they may impact employers.

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Learning Objectives

Upon completing this course, participants will understand:

  • California UI Fund Solvency During 2020 Until Now
  • FUTA Normal Credit
  • FUTA Additional Credit
  • FUTA Wage Base
  • FUTA Additional Credit Reduction
  • California Schedule of Possible Credit Reductions
  • Computations for 2.7 Add-on and BCR Add-on Credit Reductions
  • Annual Basic Credit Reduction
  • Estimated FUTA Tax California Employers Could Pay
  • FUTA Credit Reduction Possible Payoff of California Loan
  • Credit Reduction Relief- Avoidance
  • Credit Reduction Relief- CAP
  • Unless Something Is Done This Will Occur
  • Possible Solutions to UI Fund
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Course Specifics

Course ID
Revision Date
April 6, 2022


Advanced Preparation


Compliance Information

NASBA Provider Number: 103220
IRS Provider Number: 0MYXB
IRS Course Number: 0MYXB-U-01994-22-O
IRS Federal Tax Update Credits: 1
CTEC Provider Number: 2071
CTEC Course Number: 2071-CE-1731
CTEC Federal Tax Update Credits: 1

CFP Notice: Not all courses that qualify for CFP® credit are registered by Western CPE. If a course does not have a CFP registration number in the compliance section, the continuing education will need to be individually reported with the CFP Board. For more information on the reporting process, required documentation, processing fee, etc., contact the CFP Board. CFP Professionals must take each course in it’s entirety, the CFP Board DOES NOT accept partial credits for courses.

CTEC Notice: California Tax Education Council DOES NOT allow partial credit, course must be taken in entirety. Western CPE has been approved by the California Tax Education Council to offer continuing education courses that count as credit towards the annual “continuing education” requirement imposed by the State of California for CTEC Registered Tax Preparers. A listing of additional requirements to register as a tax preparer may be obtained by contacting CTEC at P.O. Box 2890, Sacramento, CA, 95812-2890, by phone toll-free at (877) 850-2832, or on the Internet at

Meet The Experts

Sole Proprietorship since 1987, CPA since 1982. James Counts has extensive experience in income tax preparation, representation of clients before tax agencies in audits. Experienced in assisting fiduciaries and serving as a trustee. Work with tax practitioners representing their clients before tax agencies.Specialties: Individual and business tax returns, California Employment Development audits, issues and representations, IRS and California Franchise Tax Board audit representation, CTFA – Certified Trust and Financial Advisor