Find out why your State Unemployment Insurance (SUI) is out of balance and how to fix it so you can pay your Federal Unemployment Tax (FUTA) and file Form 940.
If you get the message SUI Out of Balance when you try to pay your FUTA tax or file Form 940, this means you have unpaid SUI taxes in your payroll product. This only applies to QuickBooks Online Payroll with automate taxes and forms turned off.
Here’s what to look for and how to fix it.
Fix your SUI tax payments
Learn how to fix the error SUI out of balance in your online payroll service.
- Go to Taxes, then Payroll tax.
- Select Payments.
- Pay or record any outstanding SUI taxes.
- If the SUI taxes have been paid, select the Pay ▼ dropdown, then select Mark as paid.
- If you want to record historical payments, select Resources, then Record tax payments (prior tax history).
- When you’re ready, you can now file your Form 940.
Understand the relationship between FUTA and SUI
You may wonder how your SUI tax payments relate to your FUTA taxes. The actual FUTA tax rate is 6.0%. Businesses can qualify for a reduced rate of 0.6% if you pay all your SUI taxes in a timely manner and you’re not in a credit reduction state. Checkout the Instructions for Form 940 to learn more.
When you file your Form 940, we check the SUI payments you’ve made throughout the year to make sure you qualify for the discounted rate. If you have any unpaid SUI taxes in your payroll product, we want to give you the chance to fix it so you can qualify for the 0.6% rate.