FUTA Deadline Extended for Virgin Island Employers

WASHINGTON - Virgin Islands employers required to file a 1993 Federal Unemployment Tax Act (FUTA) tax return will not be assessed a late filing for late payment penalty if they file their 1993 Forms 940 by March 15, 1994. The U.S. Internal Revenue Service extended the filing deadline due to the late arrival of Forms 940 to the Virgin Islands.

Also, the IRS announced that affected businesses have until June 30, 1994 to pay any additional FUTA amount that is owed because the maximum credit allowed to Virgin Island employers has been reduced. For 1993, the Department of Labor has determined that the maximum rate to compute the additional credit on a taxable payroll for the Virgin Islands is limited to 3 percent, rather than 5.4 percent.

The IRS said that employers who elect to defer payment of any additional tax that may be owed should be certain to send it to the IRS by June 30, 1994, with a letter of explanation including the employer's name, address and employer identification number.

The IRS emphasized, however, that these relief provisions affect only late filing or late payment penalties that might otherwise be assessed. Interest will be charged on any unpaid tax amounts from the original due date, January 31, 1994, until the tax is actually paid. After receiving payment of the tax, the IRS will send employers a bill for interest due.

Due to the rate change, Virgin Islands employers must use For 940 rather than Form 940EZ to report their full tax liability (including the portion of the tax liability that may be deferred until June 30).

For further information, and to request forms and instructions, taxpayers may call the IRS assistance office toll-free on 1-800-829-1040.

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