Video: Federal Unemployment Tax Act

In this lesson, Nick Palazzolo, CPA, takes a deep dive into the Federal Unemployment Tax Act (FUTA), breaking down how it provides temporary financial assistance to those who have lost their jobs under specific conditions. He elucidates the relationship between federal and state unemployment, ensuring a clear understanding of where and how these benefits are distributed. Nick also discusses the tax implications and responsibilities for employers, detailing how FUTA taxes are calculated, paid, and how they can be deducted as business expenses. He sheds light on the conditions under which employees can claim unemployment benefits, and conversely, circumstances in which they may become ineligible. By presenting an example with XYZ Corporation, Nick makes the application of FUTA taxes concrete, demonstrating the practical impact on both the employer’s financials and the employee's safety net.