The Federal Unemployment Tax Act (FUTA) is a U.S. law that imposes a federal tax on employers 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 pay a percentage of their employees' wages, which is then used to support state unemployment insurance programs. FUTA is administered by the Internal Revenue Service (IRS), and the funds collected are used to maintain the federal-state unemployment insurance system. States can also impose their own unemployment taxes, which are used to pay benefits at the state level.