What is FUTA tax?
If your company receives credit toward federal unemployment (FUTA) tax for
state unemployment tax contributions, you can set QuickBooks to apply the
credit when it calculates your FUTA tax liability. When the credit is in
effect, QuickBooks calculates your FUTA tax liability at a lower rate. If your
company does not qualify, you pay the tax at a higher rate.
Note: Most companies qualify for a credit toward FUTA tax. To verify
your eligibility for the FUTA credit, contact your accountant, your
professional tax advisor, or the Internal Revenue Service.
Go to the Lists menu and click Payroll Item List.
Select Federal Unemployment.
Click Payroll Item at the bottom of the list and click Edit Payroll Item.
Click Next until you see the Federal unemployment tax rate screen.
Select the lower rate.
Click Next until you can click Finish.