Florida Contractor Practice Exam

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Prepare for the Florida Contractor Exam with practice tests featuring multiple choice questions and answers. Enhance your knowledge to succeed in various categories of contractor licensing in Florida.

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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What is the FUTA tax rate for a Florida Company claiming full credit for Florida Unemployment Compensation Tax?

8%
6%
0.8%
8%

The correct answer is: 6%

The FUTA tax rate for employers is typically 6.0%, which applies to the first $7,000 of each employee’s wages. However, this federal tax rate can be reduced when employers pay their state unemployment taxes on time and in full. In Florida, if a company claims the full credit for state taxes paid, which is 5.4%, the effective FUTA rate drops to 0.6%. This allows the adjusted FUTA tax to be perceived as 0.8% when the state unemployment tax rate is factored in, considering the 6.0% initial rate minus the full credit applied, leading to a net FUTA tax rate of 0.8% for Florida companies. Understanding the specific reduction for Florida's Unemployment Compensation Tax is crucial for employers in effectively calculating their tax liabilities. The company claiming the full state unemployment tax credit recognizes the importance of maximizing tax efficiencies while remaining compliant with tax regulations.