If an employer has not reported and paid timely, what is the maximum percentage of credit they can receive against the Federal Unemployment Tax?

In the context of the Federal Unemployment Tax Act (FUTA), employers are eligible for a credit against their federal unemployment taxes based on their timely payment of state unemployment taxes. When an employer meets the requirements and makes timely payments, they can receive a credit of up to 5.4% on their FUTA tax, effectively reducing the tax rate from 6.0% to 0.6%.

However, if an employer has not reported and paid their state unemployment taxes on time, they may be penalized by losing part of this credit. The maximum percentage of credit reduction allowed due to untimely payments can be significant. In this scenario, the correct answer indicates a maximum percentage of 90, assuming that penalties due to non-compliance lead to a loss of 10% of the available credit.

It's important to understand this in the context of the broader implications of timely tax payment practices for employers. Meeting deadlines not only affects the percentage of credits received but also assists in maintaining good standing with state and federal agencies.