What does FICA Mean?
Social Security payroll taxes are collected under authority of the Federal Insurance Contributions Act (FICA). Payroll taxes are sometimes even called “FICA taxes.” The payroll taxes collected for Social Security are of course taxes, but they can also be described as contributions to the social insurance system that is Social Security. Hence the name “Federal Insurance Contributions Act.” RETURN TO TOP OF PAGE What is FUTA? The Federal Unemployment Tax Act (FUTA) provides for payments of unemployment compensation to workers who have lost their jobs. Only the employer pays FUTA tax; it is not deducted from the employees’ wages. The current rate is .8% of the first $7000 paid in wages to employees each calendar year. RETURN TO TOP OF PAGE Why do I need an Employer or Federal Identification Number (EIN)? Every individual or business that pays wages or has employees of any kind must have an identification number. The IRS application for an EIN is Form SS-4. The application can also be made
