The FUTA tax rate changed on July 1st from .8% to .6% on earnings under $7,000. Because of how Dynamics SL calculates deductions, we advised most clients to leave the rate at .8% for the remainder of the year. If the rate was changed on July 1st, then Dynamics SL capped the FUTA deduction based on the .6% rate times 7,000 = $42. Anyone that had over $42 in YTD FUTA computed did not get any more tax withheld. It did not take the wages below 7,000 times .6%.
This necessitates an adjustment to be made at the end of the year to correct the FUTA tax expense and liability. We have created a script to calculate the correct amounts by employee. Please let us or your consultant (if reading this from the Microsoft site and not the Boyer & Associates Website) know if you need us to run this script.