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E-file Form 940 Now!

Complete your Form 940 to report your Annual Federal Unemployment Taxes (FUTA).

What is Federal Tax Form 940?

Form 940 is the Employer’s Annual Federal Unemployment (FUTA) Tax Return.

The FUTA tax provides funds for paying unemployment compensation to workers who have lost their jobs.

Only employers pay FUTA tax. They do not deduct FUTA tax from their employees’ wages.

The FUTA tax only applies to the first $7,000 employers pay to each worker during the calendar tax year after subtracting any payments exempt from FUTA.

Form 940 E-Filing Deadline

The deadline for filing Form 940 for 2017 is

940 Due Date

January 31, 2018

Note: If you fully deposited all your FUTA tax when it was due, you have until February 12, 2018 to file Form 940.

Who is required to pay FUTA tax?

  • Employers will pay for employees.
  • Employers are required to pay under the following conditions:
    • If they paid $1,500 or more in employee wages during the calendar tax year or
    • They had one employee for some hours during the day for 20 or more different weeks during the current or previous tax year.
  • For Household Employees
    • If you paid cash wages of $1,000 or more in any calendar quarter during the current or previous tax year.
  • For Agricultural Employees
    • If you paid $20,000 or more in wages to farmworkers in any calendar quarter during the current or previous tax year or
    • If you had 10 or more farmworkers for some hours during the day for 20 or more different weeks during the current or previous tax period.
  • Who is exempt from paying FUTA tax?
    • Indian Tribal Governments
    • Tax Exempt Organizations
    • Employers of State or Local Governments

Required Information to File Form 940 Online

  • Business name and EIN (Employer Identification Number)
  • Total payments to all employees
  • Adjustments for state exclusions (if applicable)
  • FUTA tax and balance due or overpayment
  • FUTA liabilities per quarter
  • Futa liability deposits
IRS Form 941 2017

Steps to E-File Form 940

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  • Create your free TaxBandits account
  • Select “Create New 940 Form”
  • Enter your Employer Details
  • Choose the Tax Year
  • Complete Form 940 with our Interview-style Process
  • Enter your Online Signature PIN or complete Form 8453-EMP
  • Review, Pay, and transmit your Form directly to the IRS

What is a Credit Reduction State?

A state that hasn’t repaid money it borrowed from the federal government to pay unemployment benefits is a “credit reduction state”.

Credit against federal unemployment tax will be reduced based on the credit reduction rate for the for that credit reduction state. Use Schedule A (form 940) to calculate the credit reduction.

Penalties For not Filing Form 940 by the Deadline

Failure to file Form 940 by the deadline will result in a 5% penalty of the tax due. This amount will accrue on a monthly basis until the amount owed is paid in full. The IRS will also penalize you for making a late payment or for not paying the full amount you owe. You will be charged 2-15% of the unpaid tax depending on how many days late your payment is.

Form 940 Resources

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