FUTA, or Federal Unemployment Tax Act, is a federal law that requires employers to pay a tax to fund state unemployment insurance programs. The FUTA bulge refers to a phenomenon where employers experience a sudden and significant increase in their FUTA tax rates.
The FUTA bulge typically occurs when a state's unemployment insurance fund becomes depleted, and the state borrows money from the federal government to pay for unemployment benefits. As a result, the state's employers are charged a higher FUTA tax rate to repay the loan. futa bulge
The FUTA bulge can have a significant impact on employers, particularly those with a large workforce or those operating in states with high unemployment rates. A higher FUTA tax rate can increase an employer's labor costs, which may affect their bottom line. FUTA, or Federal Unemployment Tax Act, is a