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Free IRS 940 Template

The IRS 940 form is an annual report that employers use to report their Federal Unemployment Tax Act (FUTA) liability. This form helps the IRS track unemployment taxes owed by businesses and ensures compliance with federal regulations. To learn more about filling out this important document, click the button below.

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Table of Contents

The IRS 940 form plays a crucial role in the landscape of employment taxes, specifically addressing the Federal Unemployment Tax Act (FUTA). Employers use this form to report their annual unemployment tax liability, ensuring compliance with federal regulations. It is essential for businesses to understand the nuances of this form, as it not only determines the amount of tax owed but also reflects the contributions made to the unemployment insurance system. Filing the 940 form accurately and on time is vital, as it helps maintain eligibility for tax credits that can significantly reduce the overall tax burden. Additionally, the form includes various sections that require detailed information about the employer's payroll, the number of employees, and any adjustments that may affect the tax calculation. Understanding these components can help employers navigate their responsibilities and avoid potential penalties. As the landscape of employment law continues to evolve, staying informed about the requirements of the IRS 940 form is essential for responsible business practices.

Document Specifics

Fact Name	Description
Purpose	The IRS Form 940 is used to report and pay federal unemployment taxes (FUTA).
Filing Frequency	Employers must file Form 940 annually, typically by January 31 of the following year.
Threshold for Filing	Employers must file if they paid $1,500 or more in wages in any calendar quarter or had at least one employee for part of a day in any 20 or more weeks during the year.
State-Specific Forms	Some states require additional forms for state unemployment taxes. Governing laws vary by state.
Tax Rate	The standard FUTA tax rate is 6.0% on the first $7,000 of each employee's wages.
Credits	Employers can receive a credit of up to 5.4% against their FUTA tax for state unemployment taxes paid.

Similar forms

The IRS Form 940 is primarily used for reporting annual Federal Unemployment Tax Act (FUTA) taxes. Several other forms share similarities with Form 940 in terms of purpose, structure, or the information they collect. Below is a list of ten documents that are similar to Form 940, along with an explanation of how they relate to it.

IRS Form 941: This form is used for reporting quarterly federal payroll taxes. Like Form 940, it addresses employer tax obligations, but it focuses on income tax withholding and Social Security and Medicare taxes rather than unemployment taxes.
IRS Form 944: This is an annual version of Form 941, designed for smaller employers with a lower tax liability. Both forms require information about employee wages and taxes withheld, but Form 944 is less frequent in its filing requirements.
IRS Form 945: This form is for reporting federal income tax withheld from nonpayroll payments. Similar to Form 940, it deals with tax obligations, but it focuses on different types of payments rather than unemployment taxes.
IRS Form W-2: This form reports an employee's annual wages and the taxes withheld. While Form 940 centers on unemployment taxes, both forms are essential for accurate payroll reporting and compliance with federal regulations.
California DV-260 Form: Essential for individuals seeking protection through a restraining order, this form ensures sensitive information is kept private while law enforcement can access necessary details. To begin the process of filling out the form and protecting yourself, click California PDF Forms.
IRS Form W-3: This is a summary form that accompanies Form W-2. It aggregates data from all W-2 forms submitted by an employer. Both forms are related to employee compensation, though W-3 focuses on summarizing W-2 information rather than unemployment tax reporting.
IRS Form 1099-MISC: This form is used to report payments made to independent contractors. While it serves a different purpose than Form 940, both forms involve reporting income and tax obligations related to employment.
IRS Form 1096: This is a summary form for information returns, including 1099s and W-2s. Like Form 940, it is essential for ensuring compliance with IRS reporting requirements, although it covers different types of payments.
IRS Form 940-EZ: This is a simplified version of Form 940 for eligible employers. Both forms report FUTA taxes, but Form 940-EZ is designed for those with simpler tax situations, making it easier to file.
State Unemployment Tax Forms: Each state has its own form for reporting unemployment taxes at the state level. These forms are similar to Form 940 in that they also deal with unemployment tax obligations, but they are specific to state requirements.
IRS Form 720: This form is used to report and pay certain federal excise taxes. While it addresses different taxes, both Form 720 and Form 940 require detailed reporting of tax liabilities and are essential for compliance with federal tax laws.

Understanding these forms can help employers navigate their tax responsibilities more effectively. Each form plays a crucial role in ensuring that taxes are reported accurately and timely, which is essential for compliance with federal and state laws.

Free IRS 940 File

IRS 940 Example

	Form 940for 2020: Employer’s Annual Federal Unemployment (FUTA) Tax Return	850113
		OMB No. 1545-0028
	Department of the Treasury — Internal Revenue Service	OMB No. 1545-0028

Employer identification number

—

(EIN)

Name (not your trade name)

Trade name (if any)

Address

Number	Street			Suite or room number


City			State	ZIP code


Foreign country name		Foreign province/county		Foreign postal code

Type of Return

(Check all that apply.)

a. Amended

b. Successor employer

c. No payments to employees in 2020

d. Final: Business closed or stopped paying wages

Go to www.irs.gov/Form940 for instructions and the latest information.

Read the separate instructions before you complete this form. Please type or print within the boxes.

Part 1: Tell us about your return. If any line does NOT apply, leave it blank. See instructions before completing Part 1.

1a	If you had to pay state unemployment tax in one state only, enter the state abbreviation .	1a
1b	If you had to pay state unemployment tax in more than one state, you are a multi-state
	employer	1b
2	If you paid wages in a state that is subject to CREDIT REDUCTION	2
2		2

Check here.

Complete Schedule A (Form 940).

Check here.

Complete Schedule A (Form 940).

Part 2: Determine your FUTA tax before adjustments. If any line does NOT apply, leave it blank.

3	Total payments to all employees							.	3				.
4	Payments exempt from FUTA tax				4		.

	Check all that apply: 4a			Fringe benefits	4c	Retirement/Pension		4e		Other
		4b		Group-term life insurance	4d	Dependent care
		4b		Group-term life insurance	4d	Dependent care
5	Total of payments made to each employee in excess of
5	Total of payments made to each employee in excess of						.
	$7,000				5		.
6	Subtotal (line 4 + line 5 = line 6)							.	6				.

7	Total taxable FUTA wages (line 3 – line 6 = line 7). See instructions							.	7				.

8	FUTA tax before adjustments (line 7 x 0.006 = line 8)							.	8				.

Part 3:		Determine your adjustments. If any line does NOT apply, leave it blank.
9	If ALL of the taxable FUTA wages you paid were excluded from state unemployment tax,
9													.
	multiply line 7 by 0.054		(line 7 × 0.054 = line 9). Go to line 12					.	9				.
10	If SOME of the taxable FUTA wages you paid were excluded from state unemployment tax,
	OR you paid ANY state unemployment tax late (after the due date for filing Form 940),												.
	complete the worksheet in the instructions. Enter the amount from line 7 of the worksheet .							.	10				.

11	If credit reduction applies, enter the total from Schedule A (Form 940)							.	11				.

Part 4:		Determine your FUTA tax and balance due or overpayment. If any line does NOT apply, leave it blank.

12	Total FUTA tax after adjustments (lines 8 + 9 + 10 + 11 = line 12)							.	12				.

13	FUTA tax deposited for the year, including any overpayment applied from a prior year							.	13				.
14	Balance due. If line 12 is more than line 13, enter the excess on line 14.
	• If line 14 is more than $500, you must deposit your tax.
	• If line 14 is more than $500, you must deposit your tax.								14				.
	•	If line 14 is $500 or less, you may pay with this return. See instructions						.	14				.

15	Overpayment. If line 13 is more than line 12, enter the excess on line 15 and check a box below								15				.
		You MUST complete both pages of this form and SIGN it.				Check one:		Apply to next return.			Send a refund.



												Next N

For Privacy Act and Paperwork Reduction Act Notice, see the back of the Payment Voucher.								Cat. No. 11234O			Form	940 (2020)

850212

Name (not your trade name)

Employer identification number (EIN)

Part 5: Report your FUTA tax liability by quarter only if line 12 is more than $500. If not, go to Part 6.

16Report the amount of your FUTA tax liability for each quarter; do NOT enter the amount you deposited. If you had no liability for a quarter, leave the line blank.

16a	1st quarter (January 1 – March 31) . .	. .	.	.	.	.	.	16a
16b	2nd quarter (April 1 – June 30) . . .	. .	.	.	.	.	.	16b
16c	3rd quarter (July 1 – September 30) .	. .	.	.	.	.	.	16c
16d	4th quarter (October 1 – December 31)	. .	.	.	.	.	.	16d

17 Total tax liability for the year (lines 16a + 16b + 16c + 16d = line 17) 17

Total must equal line 12.

Part 6: May we speak with your third-party designee?

Do you want to allow an employee, a paid tax preparer, or another person to discuss this return with the IRS? See the instructions for details.

Yes. Designee’s name and phone number

Select a 5-digit personal identification number (PIN) to use when talking to the IRS.

No.

Part 7: Sign here. You MUST complete both pages of this form and SIGN it.

Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete, and that no part of any payment made to a state unemployment fund claimed as a credit was, or is to be, deducted from the payments made to employees. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.

Sign your name here

Date

/ /

Print your name here

Print your title here

Best daytime phone

Paid Preparer Use Only

Preparer’s name

Preparer’s signature

Firm’s name (or yours if self-employed)

Address

City

Check if you are self-employed

	PTIN

	Date	/	/
	EIN
	EIN
	Phone
	Phone
State	ZIP code
State	ZIP code

Page 2

Form 940 (2020)

Form 940-V, Payment Voucher

Purpose of Form

Complete Form 940-V if you’re making a payment with Form 940. We will use the completed voucher to credit your payment more promptly and accurately, and to improve our service to you.

Making Payments With Form 940

To avoid a penalty, make your payment with your 2020 Form 940 only if your FUTA tax for the fourth quarter (plus any undeposited amounts from earlier quarters) is $500 or less. If your total FUTA tax after adjustments (Form 940, line 12) is more than $500, you must make deposits by electronic funds transfer. See When Must You Deposit Your FUTA Tax? in the Instructions for Form

940.Also see sections 11 and 14 of Pub. 15 for more information about deposits.

Use Form 940-V when making any payment with F! Form 940. However, if you pay an amount with CAUTION Form 940 that should’ve been deposited, you

may be subject to a penalty. See Deposit Penalties in section 11 of Pub. 15.

Specific Instructions

Box 1—Employer identification number (EIN). If you don’t have an EIN, you may apply for one online by visiting the IRS website at www.irs.gov/EIN. You may also apply for an EIN by faxing or mailing Form SS-4 to the IRS. If you haven’t received your EIN by the due date of Form 940, write “Applied For” and the date you applied in this entry space.

Box 2—Amount paid. Enter the amount paid with Form 940.

Box 3—Name and address. Enter your name and address as shown on Form 940.

•Enclose your check or money order made payable to “United States Treasury.” Be sure to enter your EIN, “Form 940,” and “2020” on your check or money order. Don’t send cash. Don’t staple Form 940-V or your payment to Form 940 (or to each other).

•Detach Form 940-V and send it with your payment and Form 940 to the address provided in the Instructions for Form 940.

Note: You must also complete the entity information above Part 1 on Form 940.

	Detach Here and Mail With Your Payment and Form 940.
	Detach Here and Mail With Your Payment and Form 940.
Form 940-V		Payment Voucher		OMB No. 1545-0028
Form 940-V		Payment Voucher


Department of the Treasury		Don’t staple or attach this voucher to your payment.		2020
Internal Revenue Service		Don’t staple or attach this voucher to your payment.		2020
1 Enter your employer identification number (EIN).		2	Dollars		Cents
		Enter the amount of your payment.
		Make your check or money order payable to “United States Treasury”

3Enter your business name (individual name if sole proprietor).

Enter your address.

Enter your city, state, and ZIP code; or your city, foreign country name, foreign province/county, and foreign postal code.

Form 940 (2020)

Privacy Act and Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United States. We need it to figure and collect the right amount of tax. Chapter 23, Federal Unemployment Tax Act, of Subtitle C, Employment Taxes, of the Internal Revenue Code imposes a tax on employers with respect to employees. This form is used to determine the amount of the tax that you owe. Section 6011 requires you to provide the requested information if you are liable for FUTA tax under section 3301. Section 6109 requires you to provide your identification number. If you fail to provide this information in a timely manner or provide a false or fraudulent form, you may be subject to penalties.

You’re not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books and records relating to a form or instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law.

Generally, tax returns and return information are confidential, as required by section 6103. However, section 6103 allows or requires the IRS to disclose or give the information shown on your tax return to others as described in the Code. For example, we may disclose

your tax information to the Department of Justice for civil and criminal litigation, and to cities, states, the District of Columbia, and U.S. commonwealths and possessions to administer their tax laws. We may also disclose this information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism.

The time needed to complete and file this form will vary depending on individual circumstances. The estimated average time is:

Recordkeeping	9 hr., 19 min.
Learning about the law or the form . .	1 hr., 23 min.
Preparing, copying, assembling, and
sending the form to the IRS	1 hr., 36 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making Form 940 simpler, we would be happy to hear from you. You can send us comments from www.irs.gov/FormComments. Or you can send your comments to Internal Revenue Service, Tax Forms and Publications Division, 1111 Constitution Ave. NW,

IR-6526, Washington, DC 20224. Don’t send Form 940 to this address. Instead, see Where Do You File? in the Instructions for Form 940.

Understanding IRS 940

What is the IRS 940 form?

The IRS 940 form, also known as the Employer's Annual Federal Unemployment (FUTA) Tax Return, is a tax form used by employers to report and pay unemployment taxes to the federal government. This form is essential for businesses that have employees and pay unemployment taxes. It helps ensure that funds are available for unemployment benefits for workers who lose their jobs through no fault of their own.

Who needs to file the IRS 940 form?

Any employer who pays wages of $1,500 or more in any calendar quarter or has at least one employee for at least 20 weeks in a calendar year is required to file the IRS 940 form. This applies to most businesses, including corporations, partnerships, and sole proprietorships. Non-profit organizations and government entities may also need to file, depending on their specific circumstances.

When is the IRS 940 form due?

The IRS 940 form is due annually on January 31st of the following year. For example, the form for the tax year 2023 must be filed by January 31, 2024. However, if you make a payment by January 31, you can file the form by February 10. It's important to keep track of these deadlines to avoid penalties and interest on late payments.

How do I calculate the FUTA tax?

To calculate the FUTA tax, you generally take 6.0% of the first $7,000 of each employee's wages. However, if you pay state unemployment taxes, you may be eligible for a credit of up to 5.4%, reducing your effective federal rate to 0.6%. This means you would only owe $42 per employee for the year if they earn at least $7,000. Be sure to keep accurate records of your employees' wages to ensure correct calculations.

What if I don't owe any FUTA tax?

If you do not owe any FUTA tax for the year, you are still required to file the IRS 940 form. Even if your liability is zero, filing the form is necessary to report your status and fulfill your obligations as an employer. Failing to file can lead to penalties, so it's best to submit the form on time, even with no tax due.

Can I file the IRS 940 form electronically?

Yes, you can file the IRS 940 form electronically using the IRS e-file system or through authorized e-file providers. Filing electronically is often faster and more efficient, and it allows for quicker processing and confirmation of your submission. Additionally, electronic filing reduces the risk of errors that can occur with paper forms.

What should I do if I make a mistake on my IRS 940 form?

If you discover an error after filing your IRS 940 form, you can correct it by filing an amended return. Use Form 940-X, which is specifically designed for making corrections to a previously filed 940 form. Be sure to explain the changes and provide any necessary documentation to support your amendments. Timely corrections can help avoid potential penalties.

Where can I find more information about the IRS 940 form?

For more information about the IRS 940 form, you can visit the official IRS website. The site provides detailed instructions, guidelines, and resources for employers. Additionally, you can contact the IRS directly or consult with a tax professional for personalized assistance and advice regarding your specific situation.

Dos and Don'ts

When filling out the IRS 940 form, it's important to approach the task with care. This form is used to report annual Federal Unemployment Tax Act (FUTA) taxes. Here are ten things to keep in mind:

Do ensure you have accurate payroll records for the year.
Don't wait until the last minute to fill out the form. Early preparation can help avoid mistakes.
Do check the IRS website for the most current version of the form and instructions.
Don't forget to include any adjustments from previous years that may affect your current filing.
Do review the instructions carefully to understand what information is required.
Don't skip signing the form. An unsigned form is considered invalid.
Do keep a copy of the completed form for your records.
Don't assume that previous years' filings are the same. Changes can occur annually.
Do seek assistance from a tax professional if you are unsure about any part of the form.
Don't overlook deadlines. Late submissions can result in penalties.

By following these guidelines, you can navigate the process of filling out the IRS 940 form with confidence and accuracy.

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