+1 862 207 3288 Federal unemployment tax (FUTA)
The first $_______ of covered wages are subject to Federal unemployment tax (FUTA). Per Form 940 the following wages are exempt from FUTA:
A.
B.
C.
D.
E.
Federal unemployment tax (FUTA) deposits are required to be calculated and paid _____________ if the tax liability is in excess of $_________.
What is a credit reduction and what causes a state to have it? In 2012 how many states had the reduction? Was Missouri and Illinois included?
Some states allow a voluntary contribution to reduce the state unemployment tax rate. How does this work and what does it accomplish for the employer? How many states have this provision? Is it always a savings? Why or why not? Does Missouri and Illinois allow voluntary contributions?
What is a partial benefit payment?
The following unemployment tax rate schedule is in effect for the calendar year 2013 in State XX, which uses the reserve-ratio formula in determining employer contributions:
Reserve Ratio Contribution Rate
0.0% or more, but less than 1.0%. . . . . . . . . . . . . . . . . . . . . 6.7%
1.0% or more, but less than 1.2%. . . . . . . . . . . . . . . . . . . . . 6.4%
1.2% or more, but less than 1.4%. . . . . . . . . . . . . . . . . . . . . 6.1%
1.4% or more, but less than 1.6%. . . . . . . . . . . . . . . . . . . . . 5.8%
1.6% or more, but less than 1.8%. . . . . . . . . . . . . . . . . . . . . 5.5%
1.8% or more, but less than 2.0%. . . . . . . . . . . . . . . . . . . . . 5.2%
2.0% or more, but less than 2.2%. . . . . . . . . . . . . . . . . . . . . 4.9%
2.2% or more, but less than 2.4%. . . . . . . . . . . . . . . . . . . . . 4.6%
2.4% or more, but less than 2.6%. . . . . . . . . . . . . . . . . . . . . 4.3%
2.6% or more, but less than 2.8%. . . . . . . . . . . . . . . . . . . . . 4.0%
2.8% or more, but less than 3.0%. . . . . . . . . . . . . . . . . . . . . 3.7%
3.0% or more, but less than 3.2%. . . . . . . . . . . . . . . . . . . . . 3.4%
3.2% or more . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.1%
Xtreme Sports Company, which is located in State XX, had an average annual payroll of $850,000 for the three 12-month periods ending on June 30, 2013 (the computation date for the tax year 2014). As of June 30, 2013, the total contributions that had been made to Xtreme Sports Company’s reserve account, in excess of the benefits charged, amounted to $17,440. Compute:
a. Xtreme Sports Company’s reserve ratio for 2013 . . . . . . . . . . . . . . . . . . . %
b. 2014 contribution rate for the company . . . . . . . . . . . . . . . . . . . %
c. Smallest contribution that the company can make in order to reduce its tax rate if State XX permits voluntary contributions . . . . $____________
d. Tax savings realized by the company, taking into consideration the voluntary contribution made in (c) if the taxable payroll in 2014 is $980,000 . . . . . . $____________
Save a Form 940 from IRS.gov to your local or removable drive. Close the IRS.gov. Complete the form on your local or removable drive, saving again after completion of the form. Attach with your assignment solution document.
Prepare a 2013 Form 940 for the following:
Prepare the Form 940 and Schedule A for Shocking Electronics, located in California. Use the following information to complete Form 940 and Schedule A
The net FUTA tax liability for each quarter of 2013 was as follows: 1st, $220.10; 2nd, $107.60; 3rd, $101.00; and 4th, $56.10 plus the credit reduction.
Since the net FUTA tax liability did not exceed $500, the company was not required to make its first deposit of FUTA taxes until January 31, 2014. Assume that the electronic payment was made on time.
a. One of the employees performs all of his duties in another state—Arizona.
b. Total payments made to employees during calendar year 2013:
California $102,310
Arizona 18,490
Total $120,800
c. Employer contributions in California into employees’ 401(k) retirement plan: $3,500.
d. Payments made to employees in excess of $7,000: $36,500 ($11,490 from Arizona and $25,010 from California).
e. Form is to be signed by Student, Vice President.
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