Federal Unemployment Tax Act


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Federal Unemployment Tax Act

Commonly called FUTA. Legislation in the United States authorizing the federal government to levy an unemployment compensation tax, which pays for the unemployment insurance of the unemployed labor force. The taxes permitted under FUTA pay for the federal government's half of unemployment insurance; the other half is provided by states. However, FUTA sets up a fund from which states can borrow to pay for their half.
References in periodicals archive ?
3401(c)-1 of the Employment Tax Regulations, which relate to the Federal Insurance Contributions Act, the Federal Unemployment Tax Act, and federal income tax withholding, respectively.
These contributions are included in BEA's estimates of wages and salaries because the estimates are based on tabulations of the wages and salaries reported by the employers of employees covered by the Federal Unemployment Tax Act (FUTA); beginning in 1985, employers in 32 States were required to include these contributions in wages for FUTA purposes.
For federal employment tax purposes, this issue generally relates directly to a business's liability for payroll taxes: federal income tax withholding; Social Security and Medicare (together, Federal Insurance Contributions Act (FICA)); and Federal Unemployment Tax Act taxes.
If this amount is not reported as W-2 wages until used, the employer will be subject to penalties for failure to properly withhold federal and state income taxes, Federal Insurance Contributions Act taxes, Federal Unemployment Tax Act taxes, and State Unemployment Tax Act taxes.
Under IRC section 127, the employer can deduct these educational costs, and the payment is not subject to payroll tax (Federal Insurance Contributions Act [FICA], Federal Unemployment Tax Act [FUTA], or State Unemployment Tax Act [SUTA]) or workers' compensation premiums.
The covered employment tax laws include federal and state income tax withholding (ITW) laws; the Federal Insurance Contributions Act (FICA), which encompasses Social Security and Medicare taxes; the Federal Unemployment Tax Act (FUTA); and state unemployment insurance (SUI) tax laws.
Briefly, services performed in the employ of tribes generally will no longer be subject to the Federal Unemployment Tax Act tax and, with some specified exceptions, will be required to be covered under State unemployment insurance laws.
The unique partnership between states and the federal government was initiated in 1935 the Federal Unemployment Tax Act.
These contributions are included in BEA's estimate of wages and salaries because the estimates are based on tabulations of wages and salaries of employees covered by the Federal Unemployment Tax Act (FUTA), as reported by Their employers; beginning in 1985, employers in 32 States were required to include these contributions in wages for FUTA purposes.
However, the wages are not subject to Federal Insurance Contributions Act taxes, Federal Unemployment Tax Act taxes, or wage withholding.
The Court of Appeals for the Federal Circuit upheld a lower court decision that the wage caps for the Federal Insurance Contributions Act (FICA) and Federal Unemployment Tax Act (FUTA) must be calculated by reference to common law employment relationships rather than statutory employment relationships.

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