Mary Jane's cumulative year-to-date earnings are $7,200. On June 30th, Mary Jane earned $600. What is the FUTA tax amount that Mary Jane's employer must record and pay on her most recent earnings?

Question

Quizplus · Accepted Answer

FUTA tax, which stands for Federal Unemployment Tax Act, is only applied to the first $7,000 of an employee's earnings each year. Since Mary Jane's cumulative earnings have exceeded $7,000, her most recent earnings of $600 are not subject to FUTA tax.

Mary Jane's Cumulative Year-To-Date Earnings Are $7,200