See our Taxbrief section for a list of FUTA deposit due dates. Each covered employer must file a Form 940 or 940-EZ annually to report taxable wages paid during the year and reconcile quarterly deposits. The variety of state and local taxes precludes a detailed description here. In general, every employer who pays wages to employees is required to withhold income taxes from each payment of taxable wages, if required by the state or local taxing agencies. Not all states have withholding and many states do not have local taxing jurisdictions that affect payrolls.
Some employers face particularly complicated state income tax situations.
Those who conduct business operations in multiple states must meet the requirements of all the states involved. All states require employers to pay a state unemployment insurance tax. Although SUI is basically an employer tax, a few states have an employee tax as well. SUI is closely tied to the federal unemployment insurance program. If the state fund is depleted, the state may borrow from the federal government.