Overview Overview The original legislation, the federal government tax businesses which is then allocated to state unemployment agencies. It is from these agencies that unemployed workers, who are eligible to claim unemployment insurance, are paid The federal law considers a person or a business an employer if 1. Pays wages of 2. Employs one or more persons, on at least some portion of one day, in each of of the following two tests applies: or more during any calendar quarter in the current or precedingcalendar year. or more calendar weeks during the current or preceding taxable year. For 2018, the employer's tax rate is the actual FUTA tax paid is | | %, since employers are entitled to a credit against their FUTA tax liability for contributions made under approved state unemployment compensation laws. The maximum credit permitted is To obtain the maximum credit against the federal tax in 2017, the employer must make the state contributions on or before the due date for filing the annual return under FUTA, or % of the first wages paid each employee during the calendar year. However