3: An employer in the U.S. Virgin Islands, employs two individuals, whose taxable earnings to date (prior to the current pay period) are $1,420 and $32,100. During thecurrent pay period, these employees earn $3,350 and $1,700, respectively. The applicable SUTA tax rate is 4%, and the U.S. Virgin Islands SUTA threshold is $32,500.FUTA tax = $286.20SUTA tax = $202.004: An employer in Durham, North Carolina, employs three individuals, whose taxable earnings to date (prior to the current pay period) are $6,000, $22,600, and $35,800.During the current pay period, these employees earn $980, $1,600, and $1,150, respectively. The applicable SUTA tax rate is 1.2%, and the North Carolina SUTAthreshold is $26,000.FUTA tax = $SUTA tax = $FUTA rate = 0.6% on first 7000 of an Employee's salarySUTA rate = 2.1%. Threshold = $ 16500Answer 1)FUTA Tax = $ 1450 * 0.6% = $ 8.7Note:FUTA is not applicable on the other individual as its annual income is more than $ 7000.SUTA Tax = ($ 1450 + $ 2000 ) * 2.1% = $ 72.45Note:Since , the annual income ( $ 6100 + $ 8800 = $ 14900 ) is less than the threshold , the SUTA tax isapplicable on both the individuals.1) Computing the FUTA and SUTA as follows:Current Period Taxable IncomeTaxable IncomeCurrent IncomeRemarksEmployee 16,1001,450Employee 2$8,8002,000Total taxable income isTotal3,450below the SUTAthreshold limit.SUTA (3,450 x 2.1%)72.45FUTA of employee 1(FUTA is applied on first $7000, so FUTAis not required to be paid for the2)Computing the FUTA and SUTA as follows:Current Period Taxable IncomeTaxable IncomeCurrent IncomeRemarksEmployee 12$5,5002$2,200Employee 22$12,9001,950Total taxable income isEmployee 3$14,200$2,400below the SUTATotal6,550threshold limit.SUTA (6,550 x 2.1%)137.55FUTA(FUTA is applied on first $7000, so FUTAis not required to be paid for thecurrent period3)Computing the FUTA and SUTA as follows:Current Period Taxable IncomeTaxable IncomeCurrent IncomeRemarksEmployee 11,420 $3,350Employee 232,100 $1,700Total taxable income isTotal5,050below the SUTAthreshold limit.SUTA (5,050 x 4%)202FUTA (employee 1) (6% of 4,770)286.2(FUTA is applied on first $7000, so FUTAis not required to be paid for thecurrent period so it is not applicable onemployee 2) PSb 5-5 Calculate FUTA and SUTA TaxFor each of the following independent circumstances calculate both the FUTA and SUTA tax owed by the employer:NOTE: For simplicity, all calculations throughout this exercise, both intermediate and final, should be rounded to two decimal places at each calculation.1: An employer in Delaware City, Delaware, employs two individuals, whose taxable earnings to date (prior to the current pay period) are $6,100 and $8,800. During thecurrent pay period, these employees earn $1,450 and $2,000, respectively. The applicable SUTA tax rate is 2.1%, and the Delaware SUTA threshold is $16,500.FUTA tax = $0.00SUTA tax = $72.452: An employer in Bridgeport, Connecticut, employs three individuals, whose taxable earnings to date (prior to the current pay period) are $5,500, $12,900, and $14,200.During the current pay period, these employees earn $2,200, $1,950, and $2,400, respectively. The applicable SUTA tax rate is 4.9%, and the Connecticut SUTAthreshold is $15,000.FUTA tax = $0.00SUTA tax = $137.55

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