Final answer:
The FUTA tax liability for an employer with four employees, two full-time and two part-time, without any FUTA tax credits, is calculated based on 6.0% of the first $7,000 of each employee's wages. The liability sums up to a total of $1,371.90.
Step-by-step explanation:
The student's question is about calculating the employer's FUTA tax liability for a specific year. The Federal Unemployment Tax Act (FUTA) tax is a payroll tax paid by employers on employee wages. The tax provides funds for paying unemployment compensation to workers who have lost their jobs. Without any available FUTA tax credits, the FUTA tax rate is 6.0% for 2016 on the first $7,000 of each employee's earnings, with any earnings above $7,000 not subject to FUTA tax.
To calculate the FUTA tax liability, one would multiply 6.0% by the first $7,000 of each employee's earnings. In this case, the employer has four employees: two full-time employees earning $42,000 each and two part-time employees earning $5,590 and $3,275, respectively. Since the part-time employees earned less than $7,000, their full wages are subject to the FUTA tax. The full-time employees' FUTA taxes are each calculated only on the first $7,000 of their earnings.
Therefore, the employer's FUTA tax liability would be:
Adding these amounts together, the total FUTA tax liability is $420 + $420 + $335.40 + $196.50 = $1,371.90.