Form 940 - Credit Reduction IRS Changes for 2021
Updated on November 26, 2021 - 10:30 AM by Admin, TaxBandits
IRS Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, is used to report Federal Unemployment Tax Acts (FUTA) taxes to the IRS.
According to the IRS, employers who fall under these categories must file Form 940.
- Employers who paid $1500 or more to employees during any quarter of the current or prior tax year
- If you hired employees for 20 weeks of the tax year.
The following topics are covered in this article:
1. What is the Form 940 Credit Reduction State for 2021?
Credit reduction states are states that have borrowed money from the federal government but have not yet paid this back. As of tax year 2021, the US Virgin Islands is the only credit reduction state. This means that if you paid wages that are subject to this state’s unemployment compensation laws, you can apply a credit reduction of 3.3% for 2021 tax year. If you are located in the US Virgin Islands, you can indicate this by checking the box on line 2 of Form 940 and completing 940 Schedule A.
Visit https://www.taxbandits.com/payroll-forms/form-940-irs-changes/ to learn more about Form 940 Schedule A.
Need to file Form 940?
E-file with TaxBandits as low as $4.95/form Create a Free Account Now
2. Are there any IRS changes to the Form 940 for 2021?
For the 2021 tax year, there are no changes to the Form 940 fields. The Credit reduction state for the 2021 tax year is the U.S. Virgin Islands, with 3.3% as the credit reduction rate.
Below is the penalty calculator for Form 940:
|U.S. Virgin Islands (VI)||2.4%||2.7%||3.0%||3.3%|
Are you an Employer of the U.S Virgin Island?
E-file with TaxBandits along with Schedule A (Form 940) at the lowest pricing
3. Due date to file Form 940
The Federal Unemployment Tax Return must be filed annually. The deadline to file Form 940 with the IRS for the 2021 tax year is January 31, 2022.
Note: If you have deposited all the FUTA taxes on time, you can file Form 940 by February 10, 2022, instead.
Never miss the 940 deadline
File Form 940 on time every time with TaxBandits and avoid falling into late filing penalties. Get timely updates on IRS changes and deadline reminders from TaxBandits. Create a Free Account Now
4. How to e-file Form 940 with TaxBandits?
Follow these 3 simple steps to file Form 940 electronically with TaxBandits:
- Step:1 Enter Form 940 Details
- Step:2 Review the Summary Form 940
- Step:3 Pay the filing fee & transmit the completed Form to the IRS
Visit, https://www.taxbandits.com/payroll-forms/e-file-form-940-online/ to learn more about Form 940 online filing.
TaxBandits, an IRS authorized e-file provider, offers a better solution for 940 filing at the lowest price of just $4.95/form.
TaxBandits streamlines your filing and makes the process more convenient, especially by supporting both the 94x online signature PIN and Form 8453-EMP support. Plus, you will receive updates on the IRS status of your form.