Tax & payroll: Nevada Contractor Business & Law Practice Questions

What is the 2026 Social Security tax rate, and who pays it?

Social Security tax is 6.2% withheld from the employee plus a matching 6.2% paid by the employer, on wages up to the annual wage base.

What is the 2026 Social Security wage base?

For 2026, Social Security tax applies to the first $184,500 of each employee's wages. Medicare tax has no wage limit.

What is the Medicare tax rate for employers and employees?

Regular Medicare tax is 1.45% from the employee and 1.45% from the employer on all wages. The extra 0.9% Additional Medicare Tax is employee-only.

When must an employer start withholding the 0.9% Additional Medicare Tax?

The employer withholds the extra 0.9% on an employee's wages above $200,000 for the year. There is no employer match for this part.

An employee earns $1,000 gross this week (well under the wage base). How much FICA is withheld from the employee?

Employee FICA = 6.2% + 1.45% = 7.65%, so $1,000 x 7.65% = $76.50. The employer pays another $76.50.

In 2026 an employee is paid $190,000. How much Social Security tax is withheld from that employee for the year?

Social Security stops at the $184,500 wage base: $184,500 x 6.2% = $11,439. ($190,000 x 6.2% = $11,780 would ignore the cap.) Medicare still applies to all $190,000.

What are the federal unemployment (FUTA) tax rate and wage base?

FUTA is 6.0% on the first $7,000 per employee per year, paid only by the employer. A credit of up to 5.4% for state unemployment tax usually brings the net rate to 0.6%.

With the full state credit, what is the most FUTA tax an employer usually owes per employee per year?

Net FUTA rate 0.6% x $7,000 = $42 per employee. Employers in credit-reduction states owe more.

Who pays FUTA tax?

FUTA is an employer tax. It is never withheld from employees' pay.

An employer's FUTA liability for the first quarter is $380. What must it do?

If FUTA liability for a quarter is $500 or less, it is carried to the next quarter. Once the running total is over $500, it is deposited by the last day of the month after the quarter.

Which form does an employer file quarterly to report withheld income tax and both shares of Social Security and Medicare tax?

Form 941 is the Employer's Quarterly Federal Tax Return. Form 940 is the annual FUTA return.

When is Form 941 for the second quarter (April-June) generally due?

Form 941 is due by the last day of the month after the quarter ends. If all taxes were deposited on time, the employer has until the 10th day of the second month (August 10).

How often does an employer generally file Form 940?

Form 940 reports FUTA tax for the calendar year and is generally due January 31 of the next year (February 10 if all FUTA was deposited on time), moved to the next business day when the date falls on a weekend.

For 2026, what is the lookback period that sets a Form 941 filer's deposit schedule?

For Form 941 filers, the lookback period is the four quarters from July 1 two years back through June 30 of the prior year.

An employer reported $38,000 of employment taxes in its lookback period. What deposit schedule applies?

An employer that reported $50,000 or less in the lookback period is a monthly depositor; more than $50,000 makes it a semiweekly depositor.