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The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both taxes...

The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both taxes are applied to the first $7,000 of an employee's pay. Assume that an employee earned total wages of $2,900 in the current period and had cumulative pay for prior periods of $5,800. What is the amount of unemployment taxes the employer must pay on this employee's wages for the current period?

A) 420 B) 0 C) 174 D) 348 E) 72

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Answer #1

Total amount of unemployment taxes to be paid by employer

= (7,000-5,800) * (0.6%+5.4%)

= 1,200 * 6%

= 72

Option E

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