Fill Out IRS Form 940 Online

What is Form 940 used for

Form 940 reports an employer's annual Federal Unemployment Tax Act (FUTA) liability to the IRS. Together with state unemployment systems, FUTA provides funds for paying unemployment compensation to workers who have lost their jobs.

Most employers pay both federal and state unemployment taxes. Employers who paid state unemployment tax on time generally receive a credit against their FUTA tax, and employers in states with outstanding federal loans may face a credit reduction reported on Schedule A.

Who needs to file Form 940

Employers generally must file Form 940 if they paid wages above the threshold in the instructions during a calendar quarter, or if they had one or more employees for part of a day in enough weeks of the year. Household and agricultural employers have their own tests, so review the official instructions for the exact criteria.

Only employers file Form 940 and only employers pay FUTA tax. If you had no employees during the year, you typically do not need to file unless you are otherwise required to.

How to fill out Form 940

The form is organized into seven parts. Have your payroll totals for the year and your state unemployment account details ready before you start.

• Enter your EIN, business name, trade name if any, and address at the top, and check a box for the type of return if it is amended, final, or for a successor employer.
• Part 1: identify the state where you paid unemployment tax, or check the multi-state box and attach Schedule A if you paid in more than one state or in a credit reduction state.
• Part 2: report total payments to all employees, subtract exempt payments and amounts above the annual FUTA wage base (check the current base in the instructions), and compute your FUTA tax before adjustments.
• Part 3: apply adjustments if some or all of your FUTA wages were excluded from state unemployment tax or if you paid state tax late.
• Part 4: total your FUTA tax after adjustments and figure any balance due or overpayment.
• Part 5: report your quarterly FUTA liability if your total tax for the year exceeds the amount in the instructions.
• Parts 6 and 7: name a third-party designee if you want one, then sign and date the return.

Where to send it and deadlines

Form 940 is an annual return, generally due by January 31 for the prior calendar year. If you deposited all of your FUTA tax when it was due, the IRS gives you additional time to file; check the current instructions for the exact extended date.

You can file electronically, which the IRS supports for Form 940, or mail a paper return. Paper filing addresses vary by state and by whether a payment is included, so confirm the correct address in the official instructions.