Page 270 - Essentials of Payroll: Management and Accounting

Unemployment Insurance
• When a household employer pays cash wages of less than
$1,000 for all household employees in any calendar quarter for
household work in a private home, local college club, or local
chapter of a college fraternity or sorority.
• When an agricultural employer pays cash wages of less than

$20,000 to farm workers in any calendar quarter, or employs
fewer than 10 farm workers during at least some part of a day
during any 20 or more different weeks during the year.
• When wages are paid to an H-2(A) visa worker.

• When services are rendered to a federally recognized Native
American tribal government.
• When the employer is a religious, educational, or charitable
organization that qualifies as a 501(c)(3) entity under the
federal tax laws.
• The employer is a state or local government.

Furthermore, wages are not subject to the tax if they are noncash
payments, expense reimbursements, or various disability payments; and

there is no FUTA requirement for full-commission insurance agents,
working inmates, work within a family, work by nonemployees (such as
consultants), and several other limited situations.
An employer must calculate the amount of FUTA tax owed at the
end of each calendar quarter, after which they must be deposited (see
next section). If there are no new hires during the year, this usually
results in nearly all FUTA taxes being paid in the first quarter, with the

remainder falling into the second quarter.
If payroll is outsourced, the supplier makes money by withholding
the FUTA tax in every pay period and retaining the funds in an interest-
bearing account until they are due for payment to the government at
the end of the quarter.

243