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| Name | A Brief Guide to the Federal Unemployment Tax Act - Lessons in Payroll with Charles Read |
| Video Uploader | Video From GetPayroll |
| Upload Date | This Video Uploaded At 15-12-2022 20:00:30 |
| Video Discription | #payroll #education #futa GetPayroll President Charles Read shares his years of knowledge of the payroll landscape with the masses. today's Payroll Lesson: A brief guide to the Federal Unemployment Tax Act, or FUTA for short. TRANSCRIPT: Good morning class, who’s ready for a pop quiz? [audible groans] Ha-ha That’s the spirit! Can anyone tell me what “FUTA” is? It stands for the Federal Unemployment Tax Act. Now, FUTA, along with state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs. And if you’re looking to become a business owner after passing this class, take note: As an employer, you are responsible for paying FUTA tax; it isn’t withheld from the employee’s wages. And most employers pay both state and federal unemployment taxes Now, are there guidelines? I hear you ask. Yes, we got to have some guidelines! Such as, which employers are responsible for paying this TAX? In general, if you have paid employees more than $1,500.00 in a calendar quarter, and you had employees for some part of a day in each of 20 weeks for this year or last year, you will be subject to FUTA. That is... everyone who has an employee. Now figuring out FUTA tax can be a bit tricky, but I’ll do my best to explain it. If you still have questions afterward, ask them in the comment section, starting with the phrase “FUTA Question”. And I’ll be sure to stick around after class to answer it. For example, in 2021, the FUTA tax rate was 6.0%. The tax applies to the first $7,000 you pay to each employee as wages during the year. That $7,000 is called the federal wage base. Your state wage base may be different. Generally, you can take a credit against your FUTA tax for amounts you paid into state unemployment funds. The credit may be as much as 5.4% of FUTA's taxable wages. If you’re entitled to the maximum 5.4% credit, the FUTA tax rate after the credit is 0.6%. You’re entitled to the maximum credit if you paid your state unemployment taxes in full, on time, and on all the same wages that are subject to FUTA tax. Now comes the fun part: DEPOSITING FUTA TAX. For deposit purposes, calculate FUTA tax quarterly. Determine your FUTA tax liability by multiplying the number of taxable wages paid during the quarter by 0.6%. Stop depositing FUTA tax on an employee’s wages when he or she reaches $7,000 in taxable wages for the calendar year. Finally, when you’re reporting FUTA tax, you’re going to use a Form 940, and file that Form 940 by January 31 of the year following your payroll calendar year. So, for 2021 payroll, the Form 940 must be filed by January 31, 2022. You can also file this form electronically using a Form 940 E-File if you prefer. Well, that is all the time we have for today, If you have any questions or would like to learn more about FUTA Tax or the payroll process in general please visit our website www.getpayroll.com and we’ll see you for the next lesson. Thanks for listening. x9F7cNJR76M |
| Category | Education |
| Tags | irs form 940 | federal unemployment tax act | payroll taxes | GetPayroll | Payroll education | futa tax calculation example | futa tax meaning | payroll specialist | payroll services | how to calculate futa | what is futa |
