Form 940-PR, Puerto Rican Employer’s Annual Federal Unemployment (FUTA) Tax Return, is used to provide funds for paying unemployment compensation to workers who have lost their jobs. Only employers pay FUTA tax since FUTA tax cannot be deducted 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.
The due date for filing Form 940-PR for the 2017 tax year is January 31, 2018
Note: If you deposited all your FUTA tax when it was due, you may File Form 940 by February 12, 2018.
A credit reduction state is one that has not repaid money it borrowed from the federal government to pay unemployment benefits.
Any credit against federal unemployment tax will be reduced based on the credit reduction rate for that credit reduction state. Use Schedule A (Form 940-PR) to calculate the credit reduction.
Failing 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 owed. You will be charged a total of 2-15% of the unpaid tax depending on how many [days] late your payment is.