Payroll Account Chapter 5
The location of the employee's residence is the primary factor to be considered in determining coverage of an employee who works in more than one state.
False
The payments of FUTA taxes are included with the payments of FICA and FIT taxes and are paid as one lump sum.
False
Voluntary contribution are not required by law, but these payments are counted as part of the credit against the FUTA tax.
False
2. The maximum credit permitted against FUTA tax is 4.5 percent (75% of 6%).
False 5.4 % (90% of 6%)
FUTA coverage includes service of any nature performed outside the United States by a citizen of the United States for an American employer. The major exception is service in any adjoining countries with which United States has an agreement relating to unemployment.
True
1. The taxable wage base for FUTA is __$7000.00______ for 2017
True
14. To obtain the maximum credit of 5.4% against the FUTA tax, the employer must make 2017 calendar year state contributions on or before which date? January 31 2018
True
3. The gross FUTA tax rate is ___6.0_____ percent for 2017
True
4. The voluntary contributions increase the balance in the employers' reserve account so that a lower contribution rate may be assigned for the following year
True
7. Form 940 refers to ________.Employers annual federal unemployment FUTA tax return.
True
8. Form 940 consists of ___7_____ parts.
True
A household employer is covered under FUTA if during the present or previous year, the household employer paid $1,000 or more during any quarter for household services in a private home, college club, or local fraternity or sorority club.
True
An employer who is subject to FUTA must file form 940 with the federal government. Normally, the form must be filed by January 31 ; however if all deposits are made on a timely basis, the form may be filed by February 10 ( February 12 ) The total taxable wages are computed by deducting exempt payments and wages paid each employees in excess of $7000.00 from the total wages paid during the year.
True
Educational assistance payments to workers are considered nontaxable wages for unemployment purposes.
True
Employer contributions made to employees' 401(k) plans that are included in total payments on Form 940 are also then deducted as exempt payments.
True
For a company that has ceased operations during the year, the employer must: Attach a statement giving the name and address of the person(s) in charge of the required payroll records. Check the appropriate"Type of Return" box on Form 940.
True
For any amendment in the information filled in prior Form 940, an employer must complete a new Form 940 for the year being amended and: attach an explanation and check the "Amended" box.
True
Form 940 mailed by the due date is timely filed even if received by the IRS after the due date.
True
In certain circumstances, a FUTA tax payment can be remitted with Form 940.
True
Schedule A of Form 940 is to be completed only by employers who are required to pay state unemployment taxes in more than one state or paid wages in a state that is subject to the credit reduction.
True
The federal unemployment tax is imposed on employers, and thus, is not deducted from employees 'wages
True
The maximum credit that can be applied to the FUTA tax because of SUTA contributions is 5.4%.
True
The services performed by a student for the school where he or she is attending classes are exempt from FUTA coverage
True
Reserve Ratio Formula
Contributions-Benefits Paid , divided by Average Payroll
15. An employer, because of a favorable experience rating, is permitted to pay a state contribution at a reduced rate of 1.5 percent. What percentage of taxable wages must be paid in the aggregate to the federal and state governments?
2.1
Under which situations can an employer be liable for a net FUTA tax greater than 0.6 percent.
A. An employer is tardy in paying the state contributions. B. An employer is located in a state that has not met the repayment provisions of Title XII advances
How is the SUTA tax rate determined for a new employer.
Each state sets an initial contribution rate of not less than 1% for a specific period of time.
A bonus paid as remuneration for services is not considered taxable wages for unemployment tax purposes even if the employee has not exceeded the taxable wage base.
False
All of the states allow employers to make voluntary contributions into their state unemployment fund so that a lower tax contribution rate would be assigned.
False
Employers obtain reduced unemployment compensation rates by making voluntary contribution to the state fund across United States.
False
FUTA coverage does not include service of any nature performed outside the United States by a citizen of the United States for an American employer.
False
For the purpose of the FUTA tax, members of partnerships are considered employees.
False
If a business has ceased operations during the year, as long as the payments of the FUTA taxes have been made, a Form 940 does not need to be completed for that year.
False
If an employer pays a SUTA tax of 2.0%, the total credit that can be claimed against the FUTA tax is 2.0%
False
If an employer's FUTA tax liability for the 1st quarter is $935, no payment is required for the 1st quarter
False
If the employer pays all of the state unemployment contributions after the filing date for Form 940, the maximum credit that can be claimed against the FUTA tax is 90% of 6.0%.
False
In the case of an employee who changes jobs during the year, only the first employer must pay FUTA tax on that employee's earnings
False
12. Under the Interstate Reciprocal Coverage Arrangement, the services of a worker can be covered in the state of the election of the employer under which of the following conditions
a The employer has a place of business in that state b. The employee performs work in that state c. The employee lives in that state
Under FUTA, a person or a business is considered to be an employer for which of the below mentioned conditions
a. Employs one or more persons, on at least some portion of one day, in each of 20 or more calendar weeks during the current or preceding taxable year. b. Pays wages of $1,500 or more during any calendar quarter in the current or preceding calendar year.