Final answer:
The correct statement regarding taxes payable under FUTA is that the federal government mandates a tax on the first $7,000 of each employee's annual wages, which funds unemployment benefits; states may set higher wage bases and determine benefit durations, typically up to 26 weeks, with the possibility of extensions.
Step-by-step explanation:
The question refers to the Federal Unemployment Tax Act (FUTA), which is a federal law that mandates the collection of a federal tax from employers to fund state workforce agencies. Employers pay this tax on the first $7,000 in wages paid to each employee annually. Although this is a federal requirement, individual states have the option to set a higher taxable wage base, and 41 states have chosen to do so.
In addition, states are permitted to determine the duration of unemployment benefit payments, which generally do not exceed 26 weeks. However, during periods of high unemployment, states may offer extensions. These collected funds are then used to provide benefits to eligible unemployed workers, with the average benefit amounting to approximately one-third of the worker's previous wages, though this rate varies considerably across states.