X Success! Thank You for Downloading Form 941 Guide from TaxBandits! Please check your email now! Form 940 Schedule A for 2024 Multi-State Employer and Credit Reduction Information Charles Hardy | Last Updated: March 10, 2025 File 940 with Schedule A Managing payroll for your business just got easier—TaxBandits now offers it for FREE! Get started today Share this article Table of Contents What is Schedule A on Form 940? How to add Schedule A (Form 940) information to Form 940? How to Calculate the FUTA Tax Rate on 940? What are credit reduction states? Related Topics What is Form 940 Changes in Form 940 for 2024 IRS Form 940 Instruction Form 940 Due Date Form 940 FUTA/SUTA Form 940 Penalty Form 940 Mailing Address Form 940 vs 941 Home Payroll Forms Form 940 Schedule A You can attach the 940 Schedule A along with Form 940 at no additional cost with TaxBandits! What is Form 940 Schedule A? Form 940 Schedule A, Multi-State Employer and Credit Reduction Information is used by employers when they are required to pay state unemployment tax in more than one state or if the paid wages in any state are subject to credit reduction. This form must be attached to the Form 940 when filed. How do you add Schedule A (Form 940) information to Form 940? If you’re a multi-state employer (operating in more than one state), check the box on line 1b in Form 940. Then, fill out Schedule A (Form 940) and attach it to your Form 940. If there are credit reduction states and If you paid wages subject to the unemployment tax laws of credit reduction states, check the box on line 2 in Form 940 and fill out Schedule A (Form 940). The total from Schedule A is entered on Form 940, Line 11. The total entered here should match the total credit reduction calculated on 940 Schedule A. Click here to learn the line-by-line instructions for Form 940. How to calculate the FUTA tax rate on 940? To calculate your FUTA tax rate, complete Form 940 Schedule A. It is a worksheet that lists the applicable tax rates in each state. You can find your credit reduction rate on Schedule A of Form 940. Enter your total credit reduction on line 11 of the Form 940. Include Schedule A at no additional cost when filing 940 with TaxBandits! With TaxBandits, you can fill out the 940 Schedule A and file it along with Form 940 at no additional cost. Form 940 at no additional cost. Our intuitive software is integrated with automated calculations and built-in error checks for accurate tax filing. Learn more What are credit reduction states? States need sufficient funds on hand to pay their unemployment insurance benefits. If a state does not have enough funds to cover the costs, it must borrow from the federal government. If a state doesn’t repay the federal loan after two years, then it might become a credit-reduction state. Employers in these states will not be able to get full credit for their FUTA tax rates. The Department of Labor determines which states are subject to credit reductions. If an employer pays wages that fall under the unemployment tax laws of a credit reduction state, they are required to pay an additional federal unemployment tax when filing Form 940. Click here to know the updated information about credit reduction states for 2024.