Which of the following is not a true statement?
A)The current FUTA tax rate is 6.2 percent of the first $7,000 of wages paid during the year to each covered employee.
B)Most states also impose an unemployment tax on employers.
C)A credit is allowed against an employer's FUTA tax liability: a maximum of 5.4 percent of the first $7,000 of wages paid during the year to each covered employee.
D)For an employee paid more than $7,000 during the year, FUTA tax paid by the employer is normally $434.
E)All of the above are true.

Question

Quizplus · Accepted Answer

This statement is not true because the FUTA tax paid by the employer is not a fixed amount for employees who earn more than $7,000 during the year. The FUTA tax rate of 6.2% applies only to the first $7,000 of wages paid to each covered employee. Therefore, the FUTA tax liability for an employee paid more than $7,000 depends on their total taxable wages for the year, not a fixed amount of $434.

Which of the Following Is Not a True Statement