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 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.
Are you ready to prepare your Form 940? Get started with TaxBandits and easily file your FUTA tax Form 940 for 2019 or even 2018. Start Filing Now
Form 940 E-Filing Deadline
The deadline for filing Form 940 for 2019 is
January 31, 2020
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 NowWho is required to pay FUTA taxes?
- Employers are required to pay FUTA taxes based on wages paid to employees.
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Employers are required to pay under the following conditions:
- If they paid $1,500 or more as 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.
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For Household Employees
- If you paid cash wages of $1,000 or more in any calendar quarter during the current or previous tax year.
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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.
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Who is exempt from paying FUTA tax?
- Indian Tribal Governments
- Tax Exempt Organizations
- Employers of State or Local Governments
Information Required 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
How to E-file Form 940 with TaxBandits
Filing Form 940 with TaxBandits is easy! Just follow these steps to complete your filing:
- Create your free TaxBandits account
- Select “Form 940”
- 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.
Getting started with our software is simple and FREE. Create forms easily with our step-by-step interview-style process, review your form summary, and transmit directly to the IRS at just $9.95/form. Best of all, you pay when you are ready to transmit your return to the IRS.
What is a Credit Reduction State?
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.
Penalties For Failure-to-File 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 your payment is late. Learn More
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