Question

CFG Company has the following employees:

Wages Paid
Eddie $12,000
Melanie 6,000
Shelly 22,000

CFG receives the maximum credit for state unemployment taxes. Required: What is the FUTA tax that CFG Company would owe for the year?

Answer 1

$120

Step-by-step explanation:

FUTA taxes = 6% - 5.4% (maximum credit for state unemployment taxes) = 0.6%

FUTA taxes are collected on the first $7,000 of annual salary paid to the employees

total FUTA tax liability:

• Eddie $7,000 x 0.6% = $42
• Melanie $6,000 x 0.6% = $36
• Shelly $7,000 x 0.6% = $42
• total = $120