Answer:
D) $1,209.00
The maximum FUTA deductions for the first quarter = $1,209.00
Step-by-step explanation:
The Federal Unemployment Tax Act (FUTA) is a tax which employers who pay their employees must pay in order to fund the state unemployment agencies. This tax is only payable on the first $1,500 to $7,000 on each emoloyees wage in a single quarter.
The FUTA current rate is 6.2%
Given that,
Employee 1 earned $5,500 in quarter 1.
Employee 2 earned $7,500 in quarter 1.
Employee 3 earned $8,000 in quarter 1.
Employee 2 and employee 3 would only be charged for their first $7,000 since they earned more than $7,000.
Therefore, the maximum FUTA deductions for the first quarter would be calculated as:
(0.062 * 5,500)+(0.062 * 7,000) + (0.062 * 7,000)
= $341 + $434 + $434
= $1,209
The maximum FUTA deductions for the first quarter = $1,209.00
