Count wages that you paid to aliens admitted to the United States on a temporary basis under an H-2A visa. However, wages paid to H-2A visa workers are not subject to FUTA tax. Enter the amount of payments that are exempt from from FUTA tax payments in Line 4, if applicable.
- While the general due date is Jan. 31, you have until Feb. 10 to file without penalties as long as you’ve made all required FUTA tax deposits on time.
- Note that credit amounts and eligibility vary across states and business types.
- You must use a business EIN, not a Social Security number (SSN) or Taxpayer Identification number (TIN).
- PEOs handle various payroll administration and tax reporting responsibilities for their business clients and are typically paid a fee based on payroll costs.
- To figure your tax liability, add the first $7,000 of each employee’s annual wages you paid during the quarter for FUTA wages paid and multiply that amount by 0.006.
- If you enter an amount on Line 4, check the appropriate box or boxes on Lines 4a through 4e to show the types of payments exempt from FUTA taxes.
IRS Form 8941 Instructions
Go to IRS.gov/EmploymentEfile for more information on electronic filing. If you file a paper return, where you file depends on whether you include a payment with Form 940. Mail your return to the address listed for your location in the table that follows. If your business was sold or transferred during the year, each employer who answered “Yes” to at least one question above must file Form 940. However, don’t include any wages paid by the predecessor employer on your Form 940 unless you’re a successor employer. For details, see Successor employer under Type of Return, later.
What Is Form 940, and How to File It?
If all of the taxable FUTA wages you paid were excluded from state unemployment tax, multiply line 7 by 0.054 and enter the result on line 9. Line 9 doesn’t apply to FUTA wages on which you paid no state unemployment tax only because the state assigned you a tax rate of 0%. However, the tribe must have participated in the state unemployment system for the full year and be in compliance with applicable state unemployment law. If you’re a household employer, you must pay FUTA tax on wages that you paid to your household employees only if you paid cash wages of $1,000 or more in any calendar quarter in 2023 or 2024. You can e-file employment tax returns Form 940, Form 941, Form 943, Form 944, and Form 945. You can also e-file corrected employment tax returns Form 941-X, Form 943-X, and Form 945-X.
Annual Filing Deadline
You need to file Form 940 if you paid $1,500 or more to employees in any quarter or had one or more employees for at least 20 different weeks in the past year. Fill in the employer’s name, address, EIN, and type of Form 940 being filed. When you’re a Pro, you’re able to pick up tax filing, consultation, and bookkeeping jobs on our platform while maintaining your flexibility. Get $30 off your tax filing job today and access an affordable, licensed Tax Professional. With a more secure, easy-to-use platform and an average Pro experience of 12 years, there’s no beating Taxfyle. E-filing ensures accuracy and saves time, leaving you form 940 instructions free to focus on your business instead of worrying about missed deadlines or incomplete filings.
Step 3: Payment of FUTA Taxes
For a list of state abbreviations, see the Schedule A (Form 940) instructions or go to the website for the U.S. If you fail to submit a deposit transaction on EFTPS by 8 p.m. Eastern time the day before the date a deposit is due, you can still make your deposit on time by using the Federal Tax Collection Service (FTCS) to make a same-day wire payment. To use the same-day wire payment method, you will need to make arrangements with your financial institution ahead of time. Please check with your financial institution regarding availability, deadlines, and costs.
Stay up to date on the latest payroll tips and training
If an employer pays wages that are subject to the unemployment tax laws of a credit reduction state, that employer must pay additional federal unemployment tax when filing its Form 940. Filing Form 940 is a critical obligation for employers to comply with federal unemployment tax requirements. Understanding the nuances of the form, such as eligibility, deductions, and payment instructions, is essential for accurate submission. Remember to review the IRS’s current instructions and updates to ensure compliance and avoid any potential penalties. Properly filing Form 940 reflects an employer’s commitment to supporting the federal-state unemployment insurance structure and their employees’ welfare. The FUTA tax rate is 6.0%, but most employers qualify for a credit of up to 5.4% if they pay state unemployment taxes on time, reducing the effective rate to 0.6%.
For further guidance, consult a tax professional or refer to the IRS guidelines. Some exceptions may apply based upon the employer’s situation. If you’re a household employer, you must pay FUTA tax on wages that you paid to your household employees only if you paid cash wages of $1,000 or more in any calendar quarter within the past 2 years. It’s about time to complete Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return. The FUTA tax return differs from other employment tax forms in a few ways.
E-filing vs. Paper Filing
To calculate how much FUTA tax an employer owes, the IRS uses Form 940 and requires the majority of employers to file it every year. The form helps both the IRS and individual employers understand and keep track of FUTA tax owed and paid throughout the year. The key difference here is that Form 941 is used to report withholding and shared taxes (those that are split 50/50 between the employee and employer). Form 940 reports FUTA tax, which is paid entirely by the employer.
- For more information about applying for a PTIN online, go to IRS.gov/PTIN.
- For detailed instructions, refer to the official IRS instructions guide.
- If line 9 is greater than zero, lines 10 and 11 must be zero because they don’t apply.
- Form 940 reports and pays FUTA tax on a quarterly basis, while Form 944 reports FUTA tax as well as the federal income tax withholding (FWT) for employers who elected the monthly deposit program.
- Most employers pay both a federal and a state unemployment tax.
- Continue carrying your tax liability over until your cumulative tax is more than $500.
Your payment will be processed by a payment processor who will charge a processing fee. Don’t use a credit or debit card to pay taxes that are required to be deposited (see When Must You Deposit Your FUTA Tax, later). For more information on paying your taxes with a credit or debit card, go to IRS.gov/PayByCard. This list of providers offers options based on the relevant tax year. You may have to pay a fee to electronically file the returns.