Unemployment compensation subject to income tax and withholding The Tax Withholding Estimator on IRS.gov can help determine if taxpayers need to adjust their withholding, consider additional tax payments, or submit a new Form W-4 to their employer. For more information about estimated tax payments or additional tax payments, visit payment options at IRS.gov/payments. The Federal Unemployment Tax Act (FUTA), with state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs. Most employers pay both a Federal and a state unemployment tax. For a list of state unemployment tax agencies, visit the U.S. Department of Labor's Contacts for State UI Tax Information and Assistance. Only the employer pays FUTA tax; it is not deducted from the employee's wages. For more information, refer to the Instructions for Form 940. U.S. Citizens and Resident Aliens Employed Abroad - FUTA Aliens Employed in the U.S. - FUTA Persons Employed in U.S. Possessions - FUTA Persons Employed by a Foreign Employer - FUTA Persons Employed by a Foreign Government or International Organization - FUTA Nonresident Alien (NRA) Withholding
