Michigan Nursing Home Administrator (NHA) Practice Exam

The federal portion of unemployment tax, known as FUTA (Federal Unemployment Tax Act), is assessed at a rate of 6.0% on the first $7,000 of taxable wages per employee. However, when employers pay state unemployment taxes on time, they can receive a credit of up to 5.4%, which effectively reduces the FUTA rate to 0.6%. In the scenario provided, the reference to a 0.7% rate represents a slight adjustment or variation due to different factors such as the employer's experience rating or previous claims. Understanding unemployment tax is crucial for nursing home administrators, as it impacts overall payroll costs and budget management in long-term care facilities. It's critical to ensure compliance with federal and state regulations regarding unemployment tax contributions, as these funds support unemployment benefits for employees who lose their jobs.