In this article, we'll discuss the federal and state unemployment tax rate for Connecticut employers in 2025. Employers should also familiarize themselves with the other 2025 federal and state labor law updates for Connecticut employers.

Connecticut FUTA Rates

The following article outlines FUTA and SUTA tax information for Connecticut for 2025.

Standard FUTA Rates

Generally, the standard FUTA tax rate is 6.0% on the first $7,000 of wages subject to FUTA. Employers would receive a universal credit of 5.4% when they file their Form-940. This will result in a net FUTA tax rate of 0.6%.

2025 FUTA Credit Reduction for Connecticut

Connecticut has resumed borrowing from the federal government and has an outstanding Federal Unemployment Account loan. Because it had an outstanding balance on at least 4 consecutive January 1st's, it is subject to a potential credit reduction of 1.2% for 2025.

If a state has outstanding loan balances on January 1 for two consecutive years and does not repay the full amount of its loans by November 10 of the second year, the FUTA credit rate (5.4%) for employers in that state will be reduced until the loan is repaid.

Employers in Connecticut will have to pay an additional 0.3% in federal unemployment tax for wages paid to employees, based on the FUTA taxable wage base of $7,000 for 2025.

2025 CT SUTA Tax Rate

In 2025, the state of Connecticut continued its effort to support CT employers as well as promote long-term UI Trust Fund solvency, by reducing the state unemployment tax rate to mitigate the impact of the federal tax credit reduction. The following Connecticut SUTA tax changes are effective as of January 1, 2025:

• The taxable wage base (TWB) increases from $25,000 to $26,100 and will keep increasing each year moving forward due to inflation.
• The state’s new employer rate decreases from 2.5% to 2.2%.
• The state’s minimum charged rate is 0.1%.
• The state’s maximum charged rate is 10.0%.
• To minimize the short-term impact of the TWB increase, charged rates in calendar year 2025 will be reduced by 1.269. As such, the state’s maximum charged rate for calendar year 2025 will be reduced to 7.9%.
• The state’s fund solvency tax rate is 1.0%. 
• The minimum and maximum contribution rates for 2025 will be 1.1% and 8.9%, respectively.

Navigate Through Federal & State Unemployment Tax

Navigating the federal and state payroll taxes is not an easy task. Connecticut employers can consult with a CT payroll provider for personalized guidance and support to ensure compliance with payroll taxes. It is also important to be caught up on Connecticut Minimum Wage before processing payroll or collecting state payroll taxes. 

Employers need to understand how these changes may affect their business and employees while making necessary adjustments to meet the new compliance requirements.