Final answer:
FUTA taxes are Unemployment taxes paid by employers to fund state unemployment agencies. They are separate from employee wage deductions and contribute alongside state taxes to support unemployment benefits.
Step-by-step explanation:
FUTA taxes are C) Unemployment taxes that employers pay to fund state workforce agencies.
FUTA stands for the Federal Unemployment Tax Act. These are taxes paid by employers based on employee wages and are used to fund unemployment benefits for workers who have lost their jobs. Unlike Social Security and Medicare taxes, FUTA taxes are not deducted from an employee's wages. Instead, employers pay these taxes from their own funds. FUTA taxes, along with state unemployment systems contributions, provide the necessary funds to state unemployment agencies to offer temporary financial assistance to employees who are currently out of work due to no fault of their own. While the FUTA tax provides the federal funds for unemployment, each state also requires a separate unemployment tax that employers must pay. The combination of FUTA and state unemployment taxes ensure that sufficient funds are available for unemployment compensation programs. It is important to note that FUTA taxes are different from other withholdings like Social Security and Medicare taxes, which are shared by both the employers and the employees. FUTA is exclusively the employer's responsibility.