Leinart Company had taxable wages (SUTA and FUTA) totaling $175,000. During the year, the company was late in paying in state contributions of 3.6% and is subject to the FUTA credit reduction. Determine the amount of net FUTA tax.

FUTA Tax= $175,000 * .36 = $63,000. Federal Unemployment Tax Act requires employers to pay tax on portion of employee's earnings to fund unemployment agencies.

Monday, December 10 2012