Example $5-6$

Park Company has a $$70,000$ federal and state taxable payroll and has earned a redeced state tax rate of $4$ percent. If none of its state tax

payments are timely, the FUTA tax calculation is as follows:

Gross FUTA tax $($$$70,0000\mathrm{.}060)$

$$4,200$

Less $90\%$ credit for state taxes paid late $($$$70,0000\mathrm{.}0490\%)$

Less additional credit for state tax if rate were $5\mathrm{.}4\%[$$$70,000(0\mathrm{.}054-0\mathrm{.}04)],980$

Total credit

Net FUTA tax

If Park Company had made its SUTA payments before the due date of Form $940,$ the credit for the payments $(4\%)$ and the additional credit $(1\mathrm{.}4\%)$

would have provided a total credit of $$3,780$ and a FUTA tax savings of $$280.$

any SUTA payments until after the Form $940$ filing date. Compute the following; round your answers to the nearest cent.

a$.$ Amount of credit the company would receive against the FUTA tax for its SUTA contributions

$

b$.$ Amount that Peroni Company would pay to the federal government for its FUTA tax

$$,x$

c$.$ Amount that the company lost because of its late payments

$

$x$

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$7$ Check My Work

a$.($Taxable wages $$ SUTA rate $90\%$ Taxable wages SUTA rate$)$