FUTA (Federal Unemployment Tax Act)
Summary Definition: U.S. law that created federal payroll taxes for funding unemployment programs.
What is FUTA?
The Federal Unemployment Tax Act (FUTA) is a federal law that imposes a payroll tax on most employers to help fund unemployment assistance programs.
The funds created by FUTA are used to provide financial assistance to workers who have lost their jobs through no fault of their own. At the state level, payroll taxes called State Unemployment Insurance (SUI) often supplement those funds raised from FUTA.
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