the Federal Unemployment Tax Act

The Federal Unemployment Tax Act (FUTA) is a U.S. law that requires employers to pay a payroll tax to fund unemployment benefits for workers who lose their jobs. This tax helps provide financial assistance to unemployed individuals while they search for new employment. Employers are responsible for paying this tax quarterly, and it is separate from the taxes withheld from employees' paychecks. The collected funds are administered by the federal government, but states also have their own unemployment programs funded through similar taxes. FUTA helps ensure a safety net for workers facing job loss.