Question

For the entire year of year 2, Ral Supermarket, Inc. conducts its business operations without any permanent or full-time employees. Ral employs temporary and part-time workers during each of the 52 weeks in the year. Under the provisions of the Federal Unemployment Tax Act (FUTA), which of the following statements is correct regarding Ral's obligation to file a federal unemployment tax return for year 2?

A) Ral is exempt from filing a FUTA return since it only had temporary and part-time workers.
B) Ral must file a year 2 FUTA return because it had at least one employee during at least 20 weeks of year 2.
C) Ral is not required to file a FUTA return as it did not have any permanent employees.
D) Ral must file a FUTA return only if it had permanent or full-time employees during the year.

Answer 1

Ral Supermarket, Inc. must file a FUTA tax return for year 2 since the company had at least one employee for at least 20 weeks of the year, irrespective of whether they were temporary or part-time employees.

Step-by-step explanation:

The question is regarding the Federal Unemployment Tax Act (FUTA) and whether Ral Supermarket, Inc. has an obligation to file a federal unemployment tax return for year 2, given that it only employed temporary and part-time workers throughout the year. According to FUTA regulations, an employer must file a FUTA tax return if they pay wages to employees totaling at least $1,500 in any quarter, or if they had at least one employee during any part of a day in any 20 or more different weeks in a year.

Therefore, the correct answer is B) Ral must file a year 2 FUTA return because it had at least one employee during at least 20 weeks of year 2. This is true regardless of whether the employees were temporary, part-time, or full-time, as FUTA does not distinguish between these types of employment with respect to the filing requirement.