Question

Wages paid after death in the calendar year after the EE's death are taxable for:

A. SS/Medi, FUTA, FITW
B. SS/Medi, FUTA
C. Not taxable for SS/Medi, FUTA, FITW
D. SS/Medi only

Answer 1

Wages paid after death are not taxable for Social Security, Medicare, FUTA, or federal income tax withholding in the calendar year after the employee's death.

Step-by-step explanation:

Wages paid after death in the calendar year after the employee's death are taxable for Social Security (SS) / Medicare (Medi), but not for the Federal Unemployment Tax Act (FUTA) or federal income tax withholding (FITW). So, the correct answer would be C: Not taxable for SS/Medi, FUTA, FITW.

This is because the Social Security and Medicare payroll taxes are considered proportional taxes up to a certain wage limit, where they then become regressive taxes, meaning that higher income individuals pay a smaller share of their income in tax.