Q:

What is the federal FUTA tax rate for 2014?

A:

Quick Answer

The Federal Unemployment Tax Rate, or FUTA tax rate, for 2014 is 6 percent and applies to the first $7,000 paid to employees as wages during the year. This is the federal wage base; state wage bases can vary.

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Full Answer

Employers paying wages subject to state unemployment tax may receive a credit of up to 5.4 percent when they file Form 940. In states that are not credit-reduction states, employers may be entitled to the maximum credit for state unemployment taxes that were paid in full and on time. Most employers pay both state unemployment tax and federal, or FUTA, tax. IRS Topic 759 details Form 940 and FUTA in greater detail.

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