Question

Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages. Queno Company had FUTA taxable wages of $510,900 during the year. Determine its: (Round your answers to two decimal places.) a. gross FUTA tax $ . b. FUTA tax credits (assuming no penalties) $ . c. net FUTA tax

Answer 1

a. $30,654

b. $27,588.60

c. $3,065.40

Step-by-step explanation:

The Gross/ Standard Federal Unemployment Tax (FUTA) is 6.0% but employers tend to receive a 5.4% reduction/ credit upon filing form 940 leaving them with a net of 0.6%.

a. The Gross tax is;

= 510,900 * 6%

= $30,654

b. FUTA Tax Credits

= 510,900 * 5.4%

= $27,588.60

c. Net FUTA Tax

= 510,900 * 0.6%

= $3,065.40