Rev. Proc. 64-53

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to restate Revenue Procedure 63-28, C.B. 1963-2, 767 and bring up to date the procedure to be followed in computing reductions in the credit against tax reportable on Form 940, Employer's Annual Federal Unemployment Tax Return, for 1961 and subsequent years.

SEC. 2. BACKGROUND.

Section 3302 of the Internal Revenue Code of 1954 provides for credits against the Federal unemployment tax imposed by section 3301 of the Code on employers of four or more employees. Reductions in the amount of credit otherwise allowable are provided for in section 3302(c) of the Code and in section 104 of the Temporary Unemployment Compensation Act of 1958. The reductions may occur if an employer pays wages for services performed in a state which has not restored to the United States Treasury amounts which were made available under title XII of the Social Security Act or under the Temporary Unemployment Compensation Act of 1958. Credit reductions for 1963 or any subsequent year may be forestalled if a state restores to the United States Treasury before November 10 of that year an amount approximately equal to the additional Federal tax which otherwise would be due for that year as a result of the credit reduction.

SEC. 3. CREDIT REDUCTIONS FOR 1961 AND 1962.

Regulations relating to reductions in credit under section 3302(c) of the Code for the calendar years 1961 and 1962 are set forth in section 31.3302(c)-1 of the Employment Tax Regulations, as amended by Treasury Decision 6658, C.B. 1963-2, 426. The credit reductions are computed by applying the following percentages to wages paid for services performed in the following States:

SEC. 4. CREDIT REDUCTIONS FOR 1963 AND SUBSEQUENT YEARS.

Public Law 88-173, approved November 7, 1963, C.B. 1963-2, 699, amended section 3302(c)(2) of the Code and section 104 of the Temporary Unemployment Compensation Act of 1958, effective for 1963 and subsequent years. Under the amended law, credit reductions apply in the following percentages to wages paid for services performed in the following States:

SEC. 5. PROCEDURE.

The computation of credit allowable is reported in Schedule A of Form 940, Employer's Annual Federal Unemployment Tax Return. If a credit reduction applies, the amount of credit otherwise allowable is first computed in Schedule A of Form 940, and the amount of the credit reduction is subtracted from the amount otherwise allowable. The remainder is then subtracted from the gross Federal tax shown on Form 940. If the employer is using a Schedule A which was not designed for the particular year for which the computation is being made, the Schedule A should be appropriately altered, or the computation should be shown on an attached sheet.

SEC. 6. EFFECT ON OTHER DOCUMENTS.

Revenue Procedure 63-28, C.B. 1963-2, 767, is hereby superseded.