If you’re an employer that needs to report any Federal Unemployment Tax Return (FUTA) tax payments you’ve made over the calendar year, use Form 940.
What is Form 940?
Form 940 is an IRS form that you can use to report on federal and state unemployment taxes for your business. FUTA states that every employer has to pay taxes that contribute to the unemployment insurance fund.
Form 940 uses many factors to calculate the amount of FUTA tax owed:
- Location(s) of your place of business
- Tax liability by quarter (determined by the number of employees)
- State unemployment tax (you get a tax credit for paying this)
- Total and adjusted FUTA tax amount
Who Should File Form 940?
In general, you must pay the FUTA tax and file Form 940 if:
- You paid $1,500 or more to employees for any calendar quarter (e.g., January to March, etc.) of the year.
- You had at least one employee work any part of a day for 20 or more different weeks throughout the tax year.
Why Use Our 940 Form Builder?
Using our builder to complete Form 940 can help in the following ways:
- Our builder’s simple language helps you with the complicated calculations for each step on the form — making it easier to figure out what you need to report.
- Avoid overpaid fees or underpaid FUTA tax. Our questions and prompts are easy to understand, so you won’t be penalized because of calculation errors.
When Are 940 Forms Due?
You must file Form 940 by January 31, 2022, for the current tax year. However, you can file by February 10, 2022, if you’ve made all of your FUTA tax payments on time. The IRS recommends that you file Form 940 electronically.
What is the Difference Between Form 940 and Form 941?
Though they are both used by employers, Form 940 is used to report unemployment tax, while Form 941 is for reporting taxes withheld from employee wages, such as Social Security tax and Medicare tax.
Form 940 Sample
Here’s what a 904 form looks like: