What is the Fedral Unemployment Tax ACT (FUTA)?

The Fdera Unemployment Tax Act applies to the first $7000 of wages for each employee during the calendar year of 2013. The FUTA rate is 6% but there is a credit for up to 5.4% of total wages for contributions paid into State Unemployment Funds. So there total federal unemployment tax rate is 0.6%. Federal Unemployment Tax is imposed on the employers and must never be deduction from wages of employees.

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