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 and it is not deducted from their employees’ wages.
Employers must pay a tax rate of 6% on the first $7000 that each employee makes. If state unemployment taxes (SUTA) can be paid on-time, the FUTA tax can be reduced to 0.6 percent.
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The deadline for filing Form 940 for 2019 is
Note: If you fully deposited all your FUTA tax when it was due you have until February 10, 2020 to file Form 940.Start E-filing Now
Filing Form 940 with TaxBandits is easy! Just follow these steps to complete your filing:
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A state that has not repaid money that it borrowed from the federal government to pay unemployment benefits is considered a credit reduction state.
Credit against federal unemployment tax will be reduced for a state based on the credit reduction rate. Use Schedule A (Form 940) to calculate the credit reduction.
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 your payment is late. Learn More
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