Question

What is the standard credit applied to the FUTA tax rate in non-credit reduction states?

  

6.0%

   

0.6%

   

5.4%

   

0.9%

What is he FUTA tax rate in a state that has a 0.6% credit reduction?

  

1.5%

   

4.8%

   

1.2%

   

1.8%

What would the FUTA and SUTA tax be for an employee whose year-to-date earnings prior to the current period are $12,400, who earns $1,500 during the current period, who works in a state with a credit reduction of 0.6%, and whose state imposes a SUTA tax rate of 2.5% with an associated wage base of $12,600?

  

FUTA - $9; SUTA $37.50

   

FUTA - $0; SUTA $5

   

FUTA - $18; SUTA $5

   

FUTA - $0; SUTA $6.20

FUTA tax payments must be made at the end of a quarter when the total tax owed exceeds what amount?

  

$7,000

   

$117,000

   

$500

   

$400

Answer 1

1. The standard credit applied to the FUTA Tax rate in non-credit reduction states is 5.4%.

2.The FUTA tax rate in a state that has a 0.6% credit reduction will be 4.8% because the srandard rate is 5.4% and if the credit reduction is 0.6% then effective FUTA tax rate will be 4.8% (5.4-0.6)%

3. FUTA - $9, SUTA - $37.5

FUTA Tax Rate = Credit Reduction

= 0.6%

therefore, FUTA Tax = 0.6% of $1500

= $9

SUTA Tax = 2.5% of $1500

= $37.5

4. FUTA tax payments must be made at the end of a quarter when the total tax owed exceeds $500.