Cowen Company began its operations in August of the current year. During August and September, the company paid wages of $2,450. For the last quarter of the year, the taxable wages paid amounted to $3,900. None of the employees were paid more than $7,000 this year. a. Is Cowen Company liable for FUTA tax this year? b. What is the net FUTA tax?
Cowen Company began its operations in August of the current year. During August and September, the company paid wages of $2,450. For the last quarter of the year, the taxable wages paid amounted to $3,900. None of the employees were paid more than $7,000 this year. a. Is Cowen Company liable for FUTA tax this year? b. What is the net FUTA tax?
Chapter5: Unemployment Compensation Taxes
Section: Chapter Questions
Problem 5PB
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Note: For this textbook edition the rate 0.6% was used for the net FUTA tax rate for employers.
Example 5-4
| Total taxable earnings (above example) | $49,290.00 | |
| Net rate of tax (6.0% − 5.4%) | × 0.6% | |
| Amount of net FUTA tax | $295.74 |
Cowen Company began its operations in August of the current year. During August and September, the company paid wages of $2,450. For the last quarter of the year, the taxable wages paid amounted to $3,900. None of the employees were paid more than $7,000 this year.
a. Is Cowen Company liable for FUTA tax this year?
b. What is the net FUTA tax? Round your answer to the nearest cent.
$fill in the blank 2
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