If your total FUTA tax liability is $100 or less at the end of any quarter, what is required?

When a taxpayer's total FUTA (Federal Unemployment Tax Act) tax liability is $100 or less at the end of any quarter, they are not required to make a deposit for those taxes. Instead, they can carry over their tax liability to the next quarter without the need to remit payment immediately. This provision is designed for small employers who may face cash flow challenges and ensures that they are not burdened by making unnecessary deposits for minimal amounts owed.

The requirement to report FUTA taxes on Form 940 comes into play at the end of the year, when all accumulated liabilities need to be accounted for, but for quarterly liabilities of $100 or less, the carryover option simplifies the process. This approach not only alleviates immediate financial pressure on small businesses but also streamlines administrative tasks, allowing them to focus on growth rather than compliance with complex tax deposit schedules.