Question

If the employer is tardy in paying the state contributions, the credit against the federal tax is limited to what percent of the late payments that would have been allowed as a credit if the contributions had been paid on time?

Answer 1

Answer:

The answer is: 90%

Explanation:

In order for an employer to qualify for the maximum credit against FUTA taxes (Federal Unemployment Tax Act), they have to file their annual return in time and also pay their state contributions in time. If they file their report late or miss the  state contributions due date, they will be sanctioned by lowering the maximum credit from 5.4% to 4.86% (90% of maximum credit).