Exam 5: Unemployment Compensation Taxes

On Form 940, even if the total FUTA tax is more than $500, there is no listing of quarterly federal unemployment tax liabilities.

For FUTA purposes, the cash value of remuneration paid in any medium other than cash is not considered taxable wages.

Services performed in the employ of a religious organization that is exempt from federal income tax are also exempt from FUTA coverage.

In order to obtain the maximum credit allowed against the federal unemployment tax, the employer must have paid its SUTA contributions by the due date of Form 940.

For FUTA purposes, an employer must pay a higher FUTA tax rate on executives than on nonsupervisory personnel.

FUTA and SUTA coverages extend to U.S.citizens working abroad for American employers.

In the case of a part-time employee, the employer pays a FUTA tax on only the first $3,500 of earnings (one-half the regular limit).

For FUTA purposes, an employer can be any one of the following except:

The mailing of Form 940 is considered timely if it is postmarked on or before the due date.

In order to avoid a credit reduction for

If an employee has more than one employer during the current year, the taxable wage base applies separately to each of those employers, unless one employer has transferred the business to the second.

If the employer is tardy in paying the state contributions, the credit against the federal tax is limited to what percent of the late payments that would have been allowed as a credit if the contributions had been paid on time?

"Dumping" is legal in all but a few states.

Partnerships do not have to pay unemployment taxes on the wages of their employees.

Once a company attains the status of employer for FUTA purposes, that status continues for four calendar years.