Question

Concord Corporation, which has a taxable payroll of $1320000, is subject to FUTA tax of 6.2% and a state contribution rate of 5.4%. However, because of stable employment experience, the company’s state rate has been reduced to 2%. What is the total amount of federal and state unemployment tax for Concord Corporation? $153120 $108240 $52800 $36960

Answer 1

The answer is: Concord Corporation´s total unemployment taxes (both federal and state) sum $108,240

Step-by-step explanation:

Concord Corporation taxable payroll is $1,320,000

We first calculate the federal unemployment tax (FUTA) at a 6.2% rate

FUTA tax 6.2% $81,840

Then we calculate the state unemployment tax rate, but we use a 2% instead of the normal 5.4%

State tax $26,400

This adds up to a total of $108,240 for both the federal and the state unemployment taxes.