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Get IRS 940 Form in PDF

The IRS 940 form is an annual tax return that employers use to report their Federal Unemployment Tax Act (FUTA) liabilities. This form helps the IRS track the taxes employers owe for unemployment insurance. Understanding the requirements and deadlines associated with Form 940 is crucial for maintaining compliance and avoiding penalties.

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The IRS 940 form is a crucial document for employers in the United States, specifically designed for reporting annual Federal Unemployment Tax Act (FUTA) taxes. This form plays a significant role in ensuring that businesses comply with federal regulations regarding unemployment taxes, which fund unemployment benefits for workers who lose their jobs. Employers are required to file Form 940 if they meet certain criteria, including having paid wages of $1,500 or more in any calendar quarter or having at least one employee for some part of a day in any 20 or more weeks during the current or preceding calendar year. The form not only summarizes the employer's FUTA tax liability but also allows for the calculation of any credits that may reduce the tax owed. It is typically due by January 31 of the following year, although extensions may be available under specific circumstances. Understanding the requirements and deadlines associated with Form 940 is essential for maintaining compliance and avoiding penalties, making it a vital aspect of payroll management for employers across the nation.

Dos and Don'ts

When filling out the IRS 940 form, it's essential to follow best practices to ensure accuracy and compliance. Here are some important dos and don’ts to keep in mind:

Do double-check your employer identification number (EIN) for accuracy.
Do report all taxable wages accurately to avoid discrepancies.
Do use the correct tax year when filling out the form.
Do keep a copy of the completed form for your records.

Don't leave any fields blank; provide information where required.
Don't forget to sign and date the form before submission.
Don't ignore the instructions provided by the IRS; they are there for a reason.
Don't submit the form late; be aware of the deadlines to avoid penalties.

Document Attributes

Fact Name	Description
Purpose	The IRS Form 940 is used to report annual Federal Unemployment Tax Act (FUTA) taxes. Employers file this form to report their liability for unemployment taxes.
Filing Deadline	Employers must file Form 940 by January 31 of the following year. If taxes are deposited on time, the deadline may be extended to February 10.
State-Specific Forms	Employers may also need to file state unemployment tax forms. Each state has its own governing laws regarding unemployment taxes, such as the California Unemployment Insurance Code.
Penalties	Failure to file Form 940 or pay the associated taxes can result in penalties and interest charges. Timely filing helps avoid these additional costs.

Key takeaways

The IRS 940 form is important for employers in the United States. Here are some key takeaways to keep in mind when filling it out and using it:

The form is used to report annual Federal Unemployment Tax Act (FUTA) taxes.
Employers must file the form if they paid $1,500 or more in wages in any calendar quarter.
It is typically due by January 31 of the following year, but if you deposited all FUTA tax owed on time, you may have until February 10.
Only employers are responsible for paying FUTA taxes; employees do not contribute.
The FUTA tax rate is 6.0% on the first $7,000 of each employee's wages.
Employers can receive a credit of up to 5.4% for state unemployment taxes paid, reducing the effective federal rate.
Ensure that you keep accurate records of wages paid and taxes collected to simplify the filing process.
Use the IRS guidelines to determine if you are eligible for any exemptions or special considerations.
Filing electronically can help reduce errors and speed up processing time.

Understanding these points can help ensure compliance and avoid potential penalties. Properly managing the IRS 940 form is essential for maintaining good standing as an employer.

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Example - IRS 940 Form

	Form 940for 2020: Employer’s Annual Federal Unemployment (FUTA) Tax Return	850113
		OMB No. 1545-0028
	Department of the Treasury — Internal Revenue Service	OMB No. 1545-0028

Employer identification number

—

(EIN)

Name (not your trade name)

Trade name (if any)

Address

Number	Street			Suite or room number


City			State	ZIP code


Foreign country name		Foreign province/county		Foreign postal code

Type of Return

(Check all that apply.)

a. Amended

b. Successor employer

c. No payments to employees in 2020

d. Final: Business closed or stopped paying wages

Go to www.irs.gov/Form940 for instructions and the latest information.

Read the separate instructions before you complete this form. Please type or print within the boxes.

Part 1: Tell us about your return. If any line does NOT apply, leave it blank. See instructions before completing Part 1.

1a	If you had to pay state unemployment tax in one state only, enter the state abbreviation .	1a
1b	If you had to pay state unemployment tax in more than one state, you are a multi-state
	employer	1b
2	If you paid wages in a state that is subject to CREDIT REDUCTION	2
2		2

Check here.

Complete Schedule A (Form 940).

Check here.

Complete Schedule A (Form 940).

Part 2: Determine your FUTA tax before adjustments. If any line does NOT apply, leave it blank.

3	Total payments to all employees							.	3				.
4	Payments exempt from FUTA tax				4		.

	Check all that apply: 4a			Fringe benefits	4c	Retirement/Pension		4e		Other
		4b		Group-term life insurance	4d	Dependent care
		4b		Group-term life insurance	4d	Dependent care
5	Total of payments made to each employee in excess of
5	Total of payments made to each employee in excess of						.
	$7,000				5		.
6	Subtotal (line 4 + line 5 = line 6)							.	6				.

7	Total taxable FUTA wages (line 3 – line 6 = line 7). See instructions							.	7				.

8	FUTA tax before adjustments (line 7 x 0.006 = line 8)							.	8				.

Part 3:		Determine your adjustments. If any line does NOT apply, leave it blank.
9	If ALL of the taxable FUTA wages you paid were excluded from state unemployment tax,
9													.
	multiply line 7 by 0.054		(line 7 × 0.054 = line 9). Go to line 12					.	9				.
10	If SOME of the taxable FUTA wages you paid were excluded from state unemployment tax,
	OR you paid ANY state unemployment tax late (after the due date for filing Form 940),												.
	complete the worksheet in the instructions. Enter the amount from line 7 of the worksheet .							.	10				.

11	If credit reduction applies, enter the total from Schedule A (Form 940)							.	11				.

Part 4:		Determine your FUTA tax and balance due or overpayment. If any line does NOT apply, leave it blank.

12	Total FUTA tax after adjustments (lines 8 + 9 + 10 + 11 = line 12)							.	12				.

13	FUTA tax deposited for the year, including any overpayment applied from a prior year							.	13				.
14	Balance due. If line 12 is more than line 13, enter the excess on line 14.
	• If line 14 is more than $500, you must deposit your tax.
	• If line 14 is more than $500, you must deposit your tax.								14				.
	•	If line 14 is $500 or less, you may pay with this return. See instructions						.	14				.

15	Overpayment. If line 13 is more than line 12, enter the excess on line 15 and check a box below								15				.
		You MUST complete both pages of this form and SIGN it.				Check one:		Apply to next return.			Send a refund.



												Next N

For Privacy Act and Paperwork Reduction Act Notice, see the back of the Payment Voucher.								Cat. No. 11234O			Form	940 (2020)

850212

Name (not your trade name)

Employer identification number (EIN)

Part 5: Report your FUTA tax liability by quarter only if line 12 is more than $500. If not, go to Part 6.

16Report the amount of your FUTA tax liability for each quarter; do NOT enter the amount you deposited. If you had no liability for a quarter, leave the line blank.

16a	1st quarter (January 1 – March 31) . .	. .	.	.	.	.	.	16a
16b	2nd quarter (April 1 – June 30) . . .	. .	.	.	.	.	.	16b
16c	3rd quarter (July 1 – September 30) .	. .	.	.	.	.	.	16c
16d	4th quarter (October 1 – December 31)	. .	.	.	.	.	.	16d

17 Total tax liability for the year (lines 16a + 16b + 16c + 16d = line 17) 17

Total must equal line 12.

Part 6: May we speak with your third-party designee?

Do you want to allow an employee, a paid tax preparer, or another person to discuss this return with the IRS? See the instructions for details.

Yes. Designee’s name and phone number

Select a 5-digit personal identification number (PIN) to use when talking to the IRS.

No.

Part 7: Sign here. You MUST complete both pages of this form and SIGN it.

Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete, and that no part of any payment made to a state unemployment fund claimed as a credit was, or is to be, deducted from the payments made to employees. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.

Sign your name here

Date

/ /

Print your name here

Print your title here

Best daytime phone

Paid Preparer Use Only

Preparer’s name

Preparer’s signature

Firm’s name (or yours if self-employed)

Address

City

Check if you are self-employed

	PTIN

	Date	/	/
	EIN
	EIN
	Phone
	Phone
State	ZIP code
State	ZIP code

Page 2

Form 940 (2020)

Form 940-V, Payment Voucher

Purpose of Form

Complete Form 940-V if you’re making a payment with Form 940. We will use the completed voucher to credit your payment more promptly and accurately, and to improve our service to you.

Making Payments With Form 940

To avoid a penalty, make your payment with your 2020 Form 940 only if your FUTA tax for the fourth quarter (plus any undeposited amounts from earlier quarters) is $500 or less. If your total FUTA tax after adjustments (Form 940, line 12) is more than $500, you must make deposits by electronic funds transfer. See When Must You Deposit Your FUTA Tax? in the Instructions for Form

940.Also see sections 11 and 14 of Pub. 15 for more information about deposits.

Use Form 940-V when making any payment with F! Form 940. However, if you pay an amount with CAUTION Form 940 that should’ve been deposited, you

may be subject to a penalty. See Deposit Penalties in section 11 of Pub. 15.

Specific Instructions

Box 1—Employer identification number (EIN). If you don’t have an EIN, you may apply for one online by visiting the IRS website at www.irs.gov/EIN. You may also apply for an EIN by faxing or mailing Form SS-4 to the IRS. If you haven’t received your EIN by the due date of Form 940, write “Applied For” and the date you applied in this entry space.

Box 2—Amount paid. Enter the amount paid with Form 940.

Box 3—Name and address. Enter your name and address as shown on Form 940.

•Enclose your check or money order made payable to “United States Treasury.” Be sure to enter your EIN, “Form 940,” and “2020” on your check or money order. Don’t send cash. Don’t staple Form 940-V or your payment to Form 940 (or to each other).

•Detach Form 940-V and send it with your payment and Form 940 to the address provided in the Instructions for Form 940.

Note: You must also complete the entity information above Part 1 on Form 940.

	Detach Here and Mail With Your Payment and Form 940.
	Detach Here and Mail With Your Payment and Form 940.
Form 940-V		Payment Voucher		OMB No. 1545-0028
Form 940-V		Payment Voucher


Department of the Treasury		Don’t staple or attach this voucher to your payment.		2020
Internal Revenue Service		Don’t staple or attach this voucher to your payment.		2020
1 Enter your employer identification number (EIN).		2	Dollars		Cents
		Enter the amount of your payment.
		Make your check or money order payable to “United States Treasury”

3Enter your business name (individual name if sole proprietor).

Enter your address.

Enter your city, state, and ZIP code; or your city, foreign country name, foreign province/county, and foreign postal code.

Form 940 (2020)

Privacy Act and Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United States. We need it to figure and collect the right amount of tax. Chapter 23, Federal Unemployment Tax Act, of Subtitle C, Employment Taxes, of the Internal Revenue Code imposes a tax on employers with respect to employees. This form is used to determine the amount of the tax that you owe. Section 6011 requires you to provide the requested information if you are liable for FUTA tax under section 3301. Section 6109 requires you to provide your identification number. If you fail to provide this information in a timely manner or provide a false or fraudulent form, you may be subject to penalties.

You’re not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books and records relating to a form or instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law.

Generally, tax returns and return information are confidential, as required by section 6103. However, section 6103 allows or requires the IRS to disclose or give the information shown on your tax return to others as described in the Code. For example, we may disclose

your tax information to the Department of Justice for civil and criminal litigation, and to cities, states, the District of Columbia, and U.S. commonwealths and possessions to administer their tax laws. We may also disclose this information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism.

The time needed to complete and file this form will vary depending on individual circumstances. The estimated average time is:

Recordkeeping	9 hr., 19 min.
Learning about the law or the form . .	1 hr., 23 min.
Preparing, copying, assembling, and
sending the form to the IRS	1 hr., 36 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making Form 940 simpler, we would be happy to hear from you. You can send us comments from www.irs.gov/FormComments. Or you can send your comments to Internal Revenue Service, Tax Forms and Publications Division, 1111 Constitution Ave. NW,

IR-6526, Washington, DC 20224. Don’t send Form 940 to this address. Instead, see Where Do You File? in the Instructions for Form 940.

Detailed Instructions for Writing IRS 940

Filling out the IRS 940 form is an important task for employers who need to report their annual federal unemployment tax. Once you have gathered all necessary information, you can start the process. Follow these steps to ensure you complete the form correctly.

Begin by downloading the IRS 940 form from the IRS website or obtain a paper copy.
Enter your employer identification number (EIN) at the top of the form.
Fill in your business name and address in the designated fields.
Indicate the tax year for which you are filing the form.
In Part 1, report the total payments made to employees during the year.
Complete Part 2 by checking the box that applies to your situation regarding state unemployment tax.
In Part 3, calculate your taxable wages and determine the amount of federal unemployment tax you owe.
Fill out Part 4 if you are eligible for any credits that reduce your tax liability.
Sign and date the form in the appropriate section at the bottom.
Make a copy of the completed form for your records before submitting it.
Mail the form to the address specified in the instructions based on your location.

Once you have submitted the form, keep an eye on any correspondence from the IRS. It's important to stay informed about any updates or additional requirements related to your filing.

Documents used along the form

The IRS 940 form is used by employers to report annual Federal Unemployment Tax Act (FUTA) taxes. While this form is essential for compliance, several other forms and documents often accompany it to ensure accurate reporting and payment of taxes. Below is a list of commonly used forms and documents that may be needed in conjunction with the IRS 940 form.

IRS 941 Form: This form is used to report quarterly federal payroll taxes. Employers must file it to report income taxes withheld from employees, as well as Social Security and Medicare taxes. It provides a detailed account of the tax liabilities incurred throughout the year.
Form 940 Schedule A: This schedule is used by employers who are liable for state unemployment taxes. It helps determine the credit reduction for employers in states that have not repaid federal loans used to pay unemployment benefits.
Hold Harmless Agreement Form: To navigate liability concerns effectively, consider the essential Hold Harmless Agreement form resources to protect your interests in contractual situations.
Form W-2: Employers must issue this form to employees annually. It reports wages paid and taxes withheld during the year. Employees use the information on Form W-2 to file their personal income tax returns.
Form 1099: This form is typically used to report payments made to independent contractors. If an employer pays a contractor $600 or more in a year, they must provide a Form 1099 to report those earnings to the IRS.

Understanding these forms and their purposes can help ensure that employers remain compliant with federal tax regulations. Properly completing and submitting these documents minimizes the risk of penalties and promotes accurate tax reporting.