Question

Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages.

Hunter Company had a FUTA taxable payroll of $192,700 for the year. Since the company is located in a state that has 1.5% FUTA credit reduction due to unpaid loans, determine Hunter's FUTA tax liability for the year.

Answer 1

Step-by-step explanation:

The organization is situated in a state with a credit decrease of 1.5 %, in this way we would register its FUTA charge by diminishing the 6% FUTA charge rate by a FUTA credit of just 3.9%, Which is the standard 5.4% credit short the 1.5 % credit decrease

This would give a compelling FUTA charge pace of 2.1 % for the year

In states that are not liable to credit decrease, the compelling FUTA charge rate stays 0.6%

The viable expense pace of FUTA will be 2.1 % for our situation.

In states that are not liable to credit decrease, the viable FUTA charge rate stays 0.6%

The powerful duty pace of FUTA will be 2.1 % for our situation.

Taxable payroll = $192,700

FUTA tax liability for the year = 7,000 × 2.1 % = $147 per year which the employer has to deposit