What is the minimum FUTA tax an employer must pay for an employee's first $9,000 of earnings?

What is the minimum FUTA tax an employer must pay for an employee's first $9,000 of earnings?

• A. $45.00
• B. $56.00
• C. $72.00
• D. $90.00

Answer: (B)

The Federal Unemployment Tax Act (FUTA) requires employers to pay a specific tax rate on the first $7,000 of an employee's earnings. As of 2023, the standard FUTA tax rate is 6.0%. To find the tax owed for an employee's first $9,000 of earnings, you would calculate the tax on just the first $7,000, since that is the taxable wage base for FUTA. Calculating the minimum FUTA tax involves multiplying $7,000 by the 6.0% rate: $7,000 x 0.06 = $420. This amount can be reduced by any credits that an employer might qualify for, such as a credit for state unemployment taxes paid. However, the calculation provided here pertains to the minimum obligation under FUTA based on the taxable wage base. Consequently, the calculation for the first $9,000 using the applicable formula leads to a total of $420, which suggests a minimum FUTA contribution by the employer. If the option "B" reflects the correct options related to credits or other factors, it should be clarified accordingly, but the general understanding of FUTA tax is centered around the first $7,000 of earnings rather

The Federal Unemployment Tax Act (FUTA) requires employers to pay a specific tax rate on the first $7,000 of an employee's earnings. As of 2023, the standard FUTA tax rate is 6.0%. To find the tax owed for an employee's first $9,000 of earnings, you would calculate the tax on just the first $7,000, since that is the taxable wage base for FUTA.

Calculating the minimum FUTA tax involves multiplying $7,000 by the 6.0% rate:

$7,000 x 0.06 = $420.

This amount can be reduced by any credits that an employer might qualify for, such as a credit for state unemployment taxes paid. However, the calculation provided here pertains to the minimum obligation under FUTA based on the taxable wage base. Consequently, the calculation for the first $9,000 using the applicable formula leads to a total of $420, which suggests a minimum FUTA contribution by the employer.

If the option "B" reflects the correct options related to credits or other factors, it should be clarified accordingly, but the general understanding of FUTA tax is centered around the first $7,000 of earnings rather