Exam 5: Unemployment Compensation Taxes

Instruction 5-1 Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages. Refer to Instruction 5-1 . Aaron Norman earned $24,900 for the year from Marcus Company. The company is subject to a SUTA tax of 4.7% on the first $9,900 of earnings. Determine:

An employer can use a credit card to pay the quarterly deposit of FUTA taxes during the year.

Employers have to pay a FUTA tax on only the first $3,500 of each part-time employee's earnings (1/2 of the full $7,000 limit).

The person who is not an authorized signer of Form 940 is:

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

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.

FUTA tax deposits cannot be paid electronically.

Instruction 5-1 Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages. a.  Complete Part 2 of Form 940 based on the following information: b. Complete Part 5 of Form 940 for the employer given the breakdown of FUTA taxable

A federal unemployment tax is levied on:

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

Currently, none of the states imposes an unemployment tax on employees.

If an employer pays unemployment taxes to two states, it will have the same SUTA tax rate in both states.

All of the states allow employers to make voluntary contributions into their state unemployment fund so that a lower tax contribution rate would be assigned.

Instruction 5-1 Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages. Refer to Instruction 5-1 . Sparks Company's SUTA rate for next year is 3.25% because its reserve ratio falls into the state's 10% to less than 12% category [(contributions - benefits paid) ÷ average payroll = $414,867 ÷ $3,521,790 = 11.78%]. If the next bracket (12% to less than 14%) would give the company a lower tax rate of 3.05%, what would be the least amount of the voluntary contribution needed to qualify the company for the 3.05% SUTA tax rate?

Fred Stone is an employee of Henrock Company. During the first part of the year, Stone earned $4,340 while working in State Q. For the remainder of the year, the company transferred him to State S where he earned $27,000. Henrock Company's tax rate in State Q is 4.6%, and in State S, 4.0% on the first $7,000. If reciprocal arrangements exist between the two states, determine the SUTA tax that the company paid on Stone's earnings in State S.

Unlike Form 941, there is no penalty for the late filing of Form 940.

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

Instruction 5-1 Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages. Refer to Instruction 5-1 . John Gercke is an employee of The Woolson Company. During the first part of the year, he earned $6,800 while working in State A. For the remainder of the year, the company transferred him to State B where he earned $16,500. The Woolson Company's tax rate in State A is 4.2%, and in State B it is 3.15% on the first $7,000. Assuming that reciprocal arrangements exist between the two states, determine the SUTA tax that the company paid to:

If the employer has made timely deposits that pay the FUTA tax liability in full, the filing of Form 940 can be delayed until:

When making a payment of FUTA taxes, the employer must make the payment by the: