Exam 5: Unemployment Compensation Taxes

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: a) the employer's FUTA tax on Norman's eamings__________ b) the employer's SUTA tax on Norman's earnings_____________

Every employer is entitled to a 5.4 percent credit against the gross FUTA tax of 6.0 percent.

Directors of corporations who only attend and participate in board of directors' meetings are not covered as employees under FUTA.

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?

​An employer can use a credit card to pay the balance with Form 940 (under $500. )

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?