Which of the following is correct about the FUTA rate options?

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Multiple Choice

Which of the following is correct about the FUTA rate options?

Explanation:
FUTA tax is 6% on the first $7,000 of wages per employee. Employers can generally receive a credit against this amount for state unemployment taxes, typically up to 5.4%, which would leave a net FUTA rate of 0.6%. But if a state has outstanding loans from the federal unemployment trust fund, that credit is reduced, pushing the net FUTA rate higher. In such a scenario, a net rate around 0.8% is a plausible outcome, which is why this option is the best choice. The other figures would require different credit scenarios that aren’t as consistent with standard practice in this context.

FUTA tax is 6% on the first $7,000 of wages per employee. Employers can generally receive a credit against this amount for state unemployment taxes, typically up to 5.4%, which would leave a net FUTA rate of 0.6%. But if a state has outstanding loans from the federal unemployment trust fund, that credit is reduced, pushing the net FUTA rate higher. In such a scenario, a net rate around 0.8% is a plausible outcome, which is why this option is the best choice. The other figures would require different credit scenarios that aren’t as consistent with standard practice in this context.

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