After an employee makes how much in one year, you stop deducting FUTA?

The correct amount at which employers stop deducting Federal Unemployment Tax Act (FUTA) taxes is $7,000. This means that once an employee's earnings for the year exceed this threshold, the employer is no longer required to withhold FUTA taxes on additional earnings for that employee.

FUTA is designed to fund unemployment benefits and is levied on the first $7,000 of an employee's wages. This threshold is significant for employers because it allows them to limit their FUTA tax liability to the initial $7,000 of each employee's wages per calendar year. Beyond this amount, employers can manage their costs more effectively as they are exempt from further FUTA tax on that employee's earnings in the same year.

In contrast, the other figures presented do not align with the regulation governing FUTA. The amount of $1,000 is too low and does not reflect current guidelines for FUTA deductions. There is indeed a limit, as indicated; thus, the choice stating "No limit" is incorrect. The figure $87,900 does not pertain to FUTA taxation; instead, it relates to Social Security wage bases and is thus unrelated to the specifics of FUTA tax deductions. Therefore, it is the $7