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This question is about employer.
What is FUTA on payroll taxes?
FUTA on payroll taxes is the Federal Unemployment Tax Act (FUTA). This is an act associated with state unemployment systems and one that provides payments in the form of unemployment compensation to workers who have lost their jobs. The majority of employers pay both state unemployment tax and federal unemployment tax.
The FUTA tax rate is 6.0% and applies to the first $7,000 an employer pays an employee as wages during a given tax year. This $7,000 figure is commonly referred to as the FUTA or federal wage base. Individual state wage bases can differ based on different rules and guidelines associated with each state.
In some cases, FUTA taxes might have to be paid before an employer files their return. Almost all employers are responsible for paying FUTA as it applies to any employer who has at least one employee that works at least 20 weeks out of a tax year, or those employers that have paid at least $1,500 in any quarter.
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