Futa

[oceanlovin'ea]

I was working on payroll reports for these 2 motels that I do payroll for that are owned by the same people. You are only required to pay state and federal unemployment tax on the first $7000 of wages paid to an employee.

What about these employess that work at both motels? Some have not hit the $7000 at one property but combined they are way over the base rate.

Is there any allowance made for this type of situation? Seems a little unfair to employer since they are paying SUTA and FUTA on more than the base rate for some people.

Linda F

[Uncle Sam]

Futa

Are the 2 motels 2 separate corporations or are they part of 1 corporation?

[Joe Btfsplk]

Futa

If they are separate entities, then FUTA would be due from both. One of my clients is an Air Traffic Controller and Soc Sec was withheld by two affiliated employers even though he maxed out on SS and had to apply the excess SS WH on his Form 1040.

The withholding is the same for two separate entities whether they are affiliated or owned by the same person. They are treated just as if they were totally different people, just as if you and your brother each owned a business and both of you employed the same people part of the time.

[oceanlovin'ea]

same thought

That was what I really thought, but it just crossed my mind and I decided to ask.

Thanks.

Linda F

[veritas]

Except

if you have two or more entities with the same ownership you can have what is called a common paymaster. This can allow you to avoid paying excess futa and fica taxes on an individual employee. However your state rules may be different. It is that way in Oregon.