Final answer:
Companies pay federal unemployment tax annually and file Form 940, the Employer's Annual Federal Unemployment (FUTA) Tax Return. The federal government taxes the first $7,000 of each employee's wages, but states can set higher wage bases for collection. The correct multiple-choice option is (c)
Step-by-step explanation:
Employers in the United States are responsible for paying federal unemployment tax to fund the unemployment insurance program. According to the Internal Revenue Service, these taxes must be filed annually, with Form 940, the Employer's Annual Federal Unemployment (FUTA) Tax Return.
Additionally, the federal requirement sets a tax collection on the first $7,000 in wages paid to each employee. However, states have the authority to collect the tax on a higher wage base, and as a result, 41 states have chosen to do so. Unemployment benefits typically represent about one-third of a person's prior wages and can last up to 26 weeks, with possible extensions during periods of high unemployment. The correct multiple-choice option is (c)