Deferring FUTA
and SUTA Taxes for Farmworkers
If you employ agricultural workers, some wages may qualify for deferral from FUTA and SUTA taxation. In these cases, Beyond will calculate and defer the appropriate taxes based on federal and state regulations — helping you avoid unexpected assessments or penalties later.
Check your state’s rules carefully
Exemptions from state unemployment (SUTA) taxes depend entirely on state laws and requirements. Not all states allow exemptions for farmworkers, so always confirm the regulations in every state where you pay employees.
How to set up FUTA and SUTA deferral
To defer these contributions, contact Beyond’s support team so we can handle the calculations and apply the deferral correctly.
Should I select “Company-Wide Exemptions”?
No. Do not mark FUTA or SUTA as exempt in your Company Preferences. Since exemptions have strict limitations, Beyond instead calculates and defers these amounts for farmworker wages. This ensures your payroll records remain accurate and ready in case wages later exceed exemption thresholds.
Exempt vs. Deferred: What’s the difference?
Some agricultural employers qualify for exemptions, but in most cases it’s more accurate to think of these taxes as deferred until your business is certain it meets the exemption criteria.
Deferral ends (and contributions become due) if either of the following occurs:
- You paid $20,000 or more in wages (including cash payments) to farmworkers – including H-2A visa workers – during any quarter of the current or prior calendar year.
- You employed 10 or more farmworkers (including H-2A visa workers) in a single day, during at least 20 different weeks (consecutive or not) in the current or prior calendar year.
Because these thresholds aren’t always clear until the year is complete, calculating and tracking potential FUTA/SUTA obligations with each pay run prevents unexpected liabilities or penalties.
How FUTA and SUTA reporting works
The Federal Unemployment Tax Act (FUTA), combined with state unemployment systems, funds unemployment benefits for workers, including those in agriculture. Employers must report wages and pay unemployment taxes using Form 940. While some exemptions apply to farmworker wages, they must still be reported.
You must file Form 940 if:
- You paid $20,000+ in farmworker wages (including H-2A visa workers) in any quarter of the current or prior year.
- You employed 10 or more farmworkers (including H-2A visa workers) in a single day, during at least 20 weeks of the current or prior year.
Why are H-2A visa workers included?
H-2A workers are temporary foreign agricultural laborers. Their wages are not directly subject to FUTA or SUTA, but both the $20,000 wage threshold and the 10-worker weekly test still include them.
Need Help?
If you still have any questions, please don’t hesitate to reach out. Our team will be happy to provide answers and assist you in any way we can.