for two consecutive years, and the full amount of the loan is not repaid by November 10 of the second year, the FUTA credit will be reduced until the loan is repaid. That process is commonly called FUTA credit reduction and was designed as an involuntary repayment mechanism. The reduction schedule is 0.3% for the first year and an additional 0.3% for each succeeding year until the loan is repaid. From the third year onward, there may be additional reduction(s) in the FUTA tax credit (commonly dubbed "add-ons"). For example, for taxable years 2012 and 2013, the Virgin Islands had a 2.7% "add-on" when its tax rate on total wages was below a national minimum. For taxable year 2014, Connecticut had a "BCR add-on" when its tax rate on the taxable portion of covered wages in the previous calendar year was less than the 5-year benefit–cost ratio applicable for the taxable year. Based on their loan status on November 10, 2016, California and the Virgin Islands are the only two jurisdictions that received reduced FUTA credit for taxable year 2016. Employers in these states will pay extra FUTA taxes that are effective retroactively to January 1, 2016. Below is a list of FUTA state credit reductions for taxable year 2009 through 2016, and their respective reduction amounts (in %): FUTA and general taxes comparison table The major taxes that employers have to pay include FUTA, SUTA, Sales Tax, Medicare, and Social Security. Businesses also pay many other taxes, such as state franchise taxes, business inventory taxes, property taxes, state income tax, federal income tax, etc. Exempt wages The following wages are exempt from Federal Unemployment Tax Act payments: Wages for services performed outside the United States. Wages paid to a deceased employee or a deceased employee's estate in any year after the year of the employee's death. Wages paid by a parent to a child under age 21, paid by a child to a parent, or paid by one spouse to the other spouse. Wages paid by a foreign government or international organization. Wages paid by a state or local government or by the United States federal government. Wages paid by a hospital to interns. Wages paid to newspaper carriers under age 18. Wages paid by a school to a student of the school. Wages paid by an organized seasonal camp to a full-time student who worked fewer than 13