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Department of the Treasury

Internal Revenue Service

Instructions for Form 940
Employer’s Annual Federal Unemployment (FUTA)
Tax Return
Section references are to the Internal Revenue Code unless otherwise noted.

Paperwork Reduction Act Form 940-EZ.—Form 940-EZ is a employees. A partnership should not
Notice simplified version of Form 940. You count its partners.
may use Form 940-EZ if: If there is a change in ownership
We ask for the information on this
1. You paid unemployment taxes or other transfer of business during
form to carry out the Internal
(“contributions”) to only one state. the year, each employer who meets
Revenue laws of the United States.
2. You paid these taxes by the test 1 or 2 must file. Neither should
You are required to give us the
due date of Form 940-EZ. report wages paid by the other.
information. We need it to ensure
3. All wages that were taxable for Organizations described in section
that you are complying with these
FUTA tax were also taxable for your 501(c)(3) do not have to file.
laws and to allow us to figure and
collect the right amount of tax. state’s unemployment tax. If, for Household Employers.—File
example, you paid wages to Form 940 if you paid cash wages of
The time needed to complete and
corporate officers (these wages are $1,000 or more in any calendar
file this form will vary depending on
taxable for FUTA tax) in a state that quarter in 1992 or 1993 for
individual circumstances. The
exempts these wages from its household work in a private home,
estimated average time is:
unemployment taxes, you cannot local college club, or a local chapter
Recordkeeping 12 hr., 55 min. use Form 940-EZ. of a college fraternity or sorority.
Learning about the 4. You did not pay wages in the Note: See Pub. 926, Employment
law or the form 18 min. U.S. Virgin Islands. Taxes for Household Employers, for
For more details, get Form more infor mation, and filled-in
Preparing and sending
940-EZ. Do not file Form 940 if you For ms 940 and 940-EZ.
the form to the IRS 31 min.
have already filed Form 940-EZ for Agricultural Employers.—File
If you have comments concerning Form 940 if either of the following
the accuracy of these time applies to you:
estimates or suggestions for making FUTA Tax Rate.—The FUTA tax rate
is 6.2% through 1998. 1. You paid cash wages of
this form more simple, we would be
$20,000 or more to farmworkers
happy to hear from you. You can Purpose of Form.—Generally, during any calendar quarter in 1992
write to both the Internal Revenue workers who have lost their jobs or 1993.
Service, Attention: Reports receive unemployment
Clearance Officer, PC:FP, compensation. The Federal 2. You employed 10 or more
Washington, DC 20224; and the Unemployment Tax Act (FUTA), farmworkers during some part of a
Office of Management and together with state unemployment day (whether or not at the same
Budget, Paperwork Reduction systems, provides for these time) for at least 1 day during any
Project (1545-0028), Washington, payments. Most employers pay both 20 different weeks in 1992 or 1993.
DC 20503. Do not send the tax form a Federal and state unemployment Count aliens admitted on a
to either of these offices. Instead, tax. Use this form for your annual temporary basis to the United States
see Where To File on page 2. FUTA tax report. Only the employer to perform farmwork, also known as
pays this tax. The $7,000 amount is workers with H-2(a) visas, to
the Federal wage base. Your state determine if you meet either test.
General Instructions However, wages paid to these aliens
wage base may be different.
U.S. Virgin Islands Employers.— are not subject to FUTA tax before
Use the current year form to avoid
For 1993, the maximum rate to 1995.
delays in processing.
compute the additional credit on the When To File.—The due date of the
taxable payroll for the U.S. Virgin Who Must File.—In general, you
must file Form 940 if you were not a 1993 Form 940 is January 31, 1994.
Islands is limited to 3%. Therefore, However, if you deposited all tax
the rate in Part II, line 3, column (f), household or agricultural employer
during 1992 or 1993, and you: when due, you may file on or before
for U.S. Virgin Islands wages is 3%. February 10. Your form is filed on
The amount in column (h) will be the 1. Paid wages of $1,500 or more time if it is properly addressed and
difference between the experience in any calendar quarter or postmarked no later than the due
rate granted and the 3% rate. See 2. You had one or more date.
the instructions for Part II, line 3, employees for some part of a day in
columns (f) and (h) on page 4. any 20 different weeks. Count all
regular, temporary, and part-time

Cat. No. 13660I
Where To File to figure your tax liability. The $7,000 employer identification number (EIN).
If your principal business, File with the
amount is the Federal wage base. Follow the instructions in the
office, or agency Internal Revenue Your state wage base may be coupon book. If you do not have
is located in: Service Center at: different. If any part of the amounts coupons, see Depositing Taxes in
Florida, Georgia, South All returns: paid are exempt from state Chapter I of Circular E, Employer’s
Carolina Atlanta, GA 39901 unemployment taxes, you may Tax Guide.
New Jersey, New York Return without payment: deposit an amount more than the New Business.—You may be
(New York City and Holtsville, NY 00501-0046 .008 rate. For example, in certain required to make deposits or file
counties of Nassau, Return with payment: states, wages paid to corporate
Rockland, Suffolk, and P.O. Box 1365 returns before you receive an EIN.
Westchester) Newark, NJ 07101-1365 officers, certain payments of sick Get Pub. 583, Taxpayers Starting a
pay by unions, and certain fringe Business, for details on how to get
New York (all other
counties), Connecticut, benefits, are exempt from state an EIN and how to file before you
All returns:
Maine, Massachusetts,
Andover, MA 05501
unemployment tax. have been assigned an EIN.
New Hampshire, Rhode
Island, Vermont Employers Not Required To Not Liable for FUTA Tax.—If you
Deposit.—If your total FUTA tax for receive Form 940 and are not liable
Illinois, Iowa, Minnesota, All returns:
Missouri, Wisconsin Kansas City, MO 64999 the year is $100 or less, you do not for FUTA tax for 1993, write “Not
have to deposit the tax. Pay your Liable” across the front, sign the
Return without payment:
Delaware, District of Philadelphia, PA
FUTA tax with your Form 940. return, and return it to the IRS.
Columbia, Maryland, 19255-0046 Employers Required To Identifying Your Payments.—Write
Pennsylvania, Puerto Rico, Return with payment:
Virginia, Virgin Islands P.O. Box 1251
Deposit.—If your liability for any of your EIN, “Form 940,” and the tax
Newark, NJ 07101-1251 the calendar year quarters of 1993 is period to which the payment applies
Return without payment:
over $100 (including any on your check or money order. This
Cincinnati, OH undeposited amount of $100 or less will help ensure proper crediting of
Indiana, Kentucky,
Michigan, Ohio, West
45999-0046 from any earlier quarter), you must your account. On balance due
Return with payment:
P.O. Box 6977
make deposits using Form 8109, payments of $100 or less (Part II,
Chicago, IL 60680-6977 Federal Tax Deposit Coupon. line 9), make your check or money
Kansas, New Mexico, All returns: If the amount is $100 or less, you order payable to the “Internal
Oklahoma, Texas Austin, TX 73301 may carry it to the next quarter. If Revenue Service.” On payments
Alaska, Arizona, California your liability for the 4th quarter (plus over $100, make your check or
(counties of Alpine, any undeposited amount from any money order payable to the
Amador, Butte, Calaveras, earlier quarter) is over $100, deposit depositary or Federal Reserve bank
Colusa, Contra Costa, Del
Norte, El Dorado, Glenn, the entire amount by the due date of where you make your deposit.
Humboldt, Lake, Lassen, Form 940 (January 31). If it is $100 Penalties and Interest.—Avoid
Marin, Mendocino, Return without payment: or less, you can either make a
Modoc, Napa, Nevada, Ogden, UT 84201-0046 penalties and interest by making tax
Placer, Plumas, deposit or pay it with your Form 940 deposits when due, filing a correct
Sacramento, San Joaquin, Return with payment: by its due date. return, and paying the proper
Shasta, Sierra, Siskiyou, P.O. Box 7028
Solano, Sonoma, Sutter, San Francisco, CA When To Deposit.—Deposit the amount of tax when due. The law
Tehama, Trinity, Yolo, and 94120-7028 FUTA tax by the last day of the first provides penalties for late deposits
Yuba), Colorado, Idaho, month following the close of the and late filing unless you show
Montana, Nebraska,
Nevada, North Dakota, quarter. reasonable cause for the delay. If
Oregon, South Dakota, you file late, attach an explanation
Utah, Washington, Quarter Ending Due Date
to the return. Get Circular E for
Jan.-Feb.-Mar. Mar. 31 Apr. 30 information on penalties.
California (all other All returns: Apr.-May-June June 30 July 31
counties), Hawaii Fresno, CA 93888 July-Aug.-Sept. Sept. 30 Oct. 31 There are also penalties for willful
Oct.-Nov.-Dec. Dec. 31 Jan. 31 failure to pay tax, keep records,
Alabama, Arkansas,
Louisiana, Mississippi,
All returns: Note: Enter the total amount of all make returns, and filing false or
Memphis, TN 37501 fraudulent returns.
North Carolina, Tennessee deposits in Part II, line 8.
If you have no legal residence or principal place If you deposited the correct Credit for Contributions Paid Into
of business in any IRS district, file with the Internal amounts, following these rules, the State Funds.—You can claim credit
Revenue Service Center, Philadelphia, PA 19255. for amounts you pay into a certified
balance due with Form 940 will
Magnetic Media Reporting.—You never be more than $100. state (including Puerto Rico and the
may file Form 940 using magnetic Deposit FUTA tax in an authorized Virgin Islands) unemployment fund
media. Pub. 1314, Magnetic Tape financial institution or the Federal by the due date of Form 940. Your
Reporting of Form 940, Employer’s Reserve bank for your area. To avoid FUTA tax will be higher if you do not
Federal Unemployment Tax Return, a possible penalty, do not mail pay the state contributions timely.
explains the requirements. You can deposits directly to the IRS. Records “Contributions” are payments that
get this publication by calling of your deposits will be sent to the state law requires you to make to an
1-800-TAX-FORM (1-800-829-3676). IRS for crediting to your business unemployment fund because you
FUTA Amount To Deposit.— accounts. See Identifying Your are an employer. These payments
Determine your FUTA tax for each of Payments on this page. are contributions only to the extent
the first three quarters by multiplying You must use Form 8109 when that they are not deducted or
by .008 that part of the first $7,000 making each tax deposit. The IRS deductible from the employees’ pay.
paid to each employee during the will send you a book of deposit Do not take credit for penalties,
quarter. For the fourth quarter, follow coupons when you apply for an interest, or special administrative
the instructions in Part III on page 4 taxes that are not included in the
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contribution rate the state complete and file Form 940. U.S. clothing. For items other than cash,
assigned to you. Do not take credit Virgin Islands employers must file use the fair market value at the time
for voluntary contributions paid to Form 940. of payment.
get a lower assigned rate. Question E—Final Return.—If you Line 2—Exempt payments.—
You may receive an additional will not have to file returns in the “Wages” and “employment” as
credit if you have an experience rate future, check box E above Part I. defined for FUTA purposes do not
lower than 5.4% (.054), (3% (.03) for Then complete and sign the return. include every payment and every
U.S. Virgin Islands.) This applies If you start paying FUTA wages kind of service an employee may
even if your rate is different during again, file Form 940 or 940-EZ. perform. In general, payments
the year. This additional credit is Question F—Amended Return.— excluded from wages and payments
equal to the difference between Be sure to use a Form 940 for the for services excepted from
actual payments and the amount year you are amending. If you are employment are not subject to tax.
you would have been required to correcting a 1990 or prior year form, You may deduct these exempt
pay at 5.4% (3% for U.S. Virgin write “Amended Return” at the top payments from total payments only
Islands.) of the form. To amend a 1991 or if you explain them on line 2.
The total credit allowable may not later Form 940, check the amended Enter payments for the following
be more than 5.4% of the total return box above Part I. File the items:
taxable FUTA wages. amended return with the Internal 1. Agricultural labor, if you did not
Special Credit for Successor Revenue Service Center where you meet either of the tests in
Employers.—A successor employer filed the original return. Complete Agricultural Employers on page 1.
is an employer who received a unit and sign a new Form 940 with the 2. Benefit payments for sickness
of an employer’s trade or business correct amounts for the tax year you or injury under a worker’s
or all or most of the property used in are correcting. Attach a statement compensation law.
the trade or business of another explaining why you are filing an
amended return. For example, you 3. Household service if you did
employer. The successor employer not pay cash wages of $1,000 or
must employ one or more individuals are filing to claim the 90% credit for
contributions paid to your state more in any calendar quarter in 1992
who were employed by the previous or 1993.
owner immediately after the unemployment fund after the due
acquisition. date of Form 940. 4. Certain family employment.
You may be eligible for a credit If you are filing an amended return 5. Certain fishing activities.
based on the state unemployment after June 30 to claim contributions 6. Noncash payments for
contributions paid by the previous to your state’s unemployment fund farmwork or household services in a
employer. You may claim these that you paid after January 31, private home that are included on
credits if you are a successor attach a copy of the certification line 1. Only cash wages to these
employer and acquired a business in from the state. This will expedite the workers are taxable.
1993 from a previous employer who processing of the amended return. 7. Value of certain meals and
is not an employer for FUTA lodging.
purposes during 1993. See section Part I—Computation of 8. Cost of group-term life
3302(e) and Regulations Taxable Wages insurance.
31.3302(e)-1. Enter in Part II, line 3, 9. Payments attributable to the
Line 1—Total payments.—Enter the
columns (a) through (i) the employee’s contributions to a sick
total payments you made to
information of the predecessor pay plan.
employees during the calendar year,
employer as if you paid the
even if they are not taxable. Include 10. Benefits that are excludable
salaries, wages, commissions, fees, under a section 125 plan (cafeteria
bonuses, vacation allowances, plan).
Specific Instructions amounts paid to temporary or 11. Any other exempt service or
Employer’s Name, Address, and part-time employees, and the value pay.
Identification Number.—Use the of goods, lodging, food, clothing,
noncash fringe benefits, and For more information, see Special
preaddressed Form 940 mailed to Rules for Various Types of
you. If you must use a form that is benefits made from a section 125
(cafeteria) plan. Include the amount Services and Products in
not preaddressed, type or print your Circular E.
name, trade name, address, and EIN of tips reported to you in writing by
your employees. Also, include Line 3.—Enter the total amounts
on it. If you do not receive your EIN
contributions to a 401(k) pension over $7,000 you paid each
by the time a return is due, write
plan. Enter the amount before any employee. For example, if you have
“Applied for” and the date you
deductions. 10 employees to whom you paid
applied for the number.
How the payments are made is $8,000 each during the year, enter
Questions A through D.—Answer $80,000 on line 1 and $10,000 on
the applicable questions. The not important in determining if they
are wages. Thus, you may pay line 3. Only the first $7,000 paid to
answers will direct you to the your employee is subject to FUTA
correct form to file. If you answered wages for piecework or as a
percentage of profits, and you may tax. DO NOT use the state wage
“Yes” to all the questions, you may limitation for this entry. Generally,
file Form 940-EZ, a simplified pay wages hourly, daily, weekly,
monthly, or yearly. You may pay the state wage base is a different
version of Form 940. If you answer amount than the Federal wage
“No” to any of the questions, wages in cash or some other way,
such as goods, lodging, food, or base of $7,000.
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If you are a successor employer pay contributions to (including advances from the Federal
and have acquired a business from Puerto Rico and the Virgin Islands). Government. Do not include
a previous owner who was an Column (b).—Enter the state amounts paid for training or job
employer liable for FUTA tax, you reporting number that was assigned development fund taxes.
may be able to count the wages to you when you registered as an Line 3a.—Enter the totals of
that employer paid to the employees employer with each state. Be sure columns (c), (h), and (i) on this line.
who continue to work for you when to enter the correct number. Line 3b.—Add line 3a, columns (h)
you figure the $7,000 wage limit. Failure to enter the correct number and (i) only. If you file Form 940 after
Enter on line 3 the payments that may result in unnecessary its due date and any contributions in
exceed the $7,000 wage base, correspondence. column (i) were made after January
including the payments by the Column (c).—Enter the state 31, 1994, your credit for late
previous employer. See code section taxable payroll on which you must contributions is limited to 90% of
3306(b) and Regulations pay taxes to the unemployment fund the amount which would have been
31.3306(b)(1)-1(b). of each state shown in column (a). If allowable as a credit on account of
Line 5—Total taxable wages.—This your experience rate is 0%, enter such contributions had they been
is the total Federal taxable wage the amount of wages that you would paid on or before January 31, 1994.
amount. Use this amount in Part II have had to pay on if the rate had For example, if $1,500 of state
to compute the maximum FUTA tax not been granted. contributions was paid on time, and
and the maximum credit. Columns (d) and (e).—Your “state $1,000 was paid after January 31,
experience rate” is the rate the state 1994, the total tentative credit on
Part II—Tax Due or Refund taxes your payroll for state line 3b would be $2,400 ($1,500 +
Line 1.—Multiply the total taxable unemployment purposes. This rate $900 (90% of $1,000)). This is
wages in Part I, line 5 by .062. This may change from time to time based assuming there is no additional
is the maximum amount of FUTA on your “experience” with the state credit in column (h).
tax. tax fund. For example, Note: If you are receiving additional
Line 2.—Multiply the total taxable unemployment compensation paid credit (column (h)) because your
wages in Part I, line 5, by .054. This to your former employees, and other state exper ience rate is less than
is the maximum credit that is used factors. If you do not know your 5.4% (3% for the U.S. Virgin
to offset FUTA tax. rate, contact your state Islands), the additional credit is not
unemployment insurance service. subject to the 90% limitation.
Line 3.—You must complete all The state experience rate can be
applicable columns to receive any Line 6.—Enter the smaller of Part II,
stated as a percent or a decimal. line 2, or line 3b. This is the credit
amount of credit. Your state will
provide an experience rate. If you Column (f).—Multiply the amount allowable for your payments to state
have been assigned an experience in column (c), Taxable payroll, by unemployment funds. If you do not
rate of 0% or more, but less than 5.4% (.054) (3% (.03) if the taxable have to make payments to the state,
5.4% for all or part of the year, use payroll is for the U.S. Virgin Islands.) enter zero on this line.
columns (a) through (i). All employers Column (h).—Subtract column (g)
in the U.S. Virgin Islands must use from column (f). If zero or less, enter Part III—Record of Quarterly
columns (a) through (i). If you have zero. This additional credit is the Federal Unemployment Tax
not been assigned any experience difference between the 5.4% (3% Liability
rate, use columns (a), (b), (c), and (i) for U.S. Virgin Islands wages) and
only. If you have been assigned a the state experience rate. Complete this part if your total tax
rate of 5.4% or higher, use columns Column (i).—Enter the (Part II, line 1, or line 7) is over $100.
(a), (b), (c), (d), (e), and (i) only. If you contributions actually paid to the To figure your FUTA tax liability for
were assigned an experience rate state unemployment fund by each of the first 3 quarters of
for only part of the year or the rate January 31, 1994. Do not include 1993, see FUTA Amount To
was changed during the year, amounts you are required to pay but Deposit on page 2. Enter this
complete a separate line for each have not paid by the January 31 due amount in the column for that
rate period. date. See Question F—Amended quarter. This is your liability, not your
Return on page 3. If you are deposit.
If you need additional lines, attach
a separate statement with a similar claiming excess credits as payments Your liability for the fourth
format. Also, if you are a successor of state unemployment quarter is the total tax (Part II, line
employer, see Special Credit for contributions, attach a copy of the 7) minus your liability for the first
Successor Employers on page 3. letter from your state. Do not include 3 quarters of the year. The total
any special assessments, surtaxes, liability must equal your total tax.
Column (a).—Enter the two-letter Otherwise, you may be charged a
abbreviation of the name of the surcharges, etc., used by the state
to pay interest on unrepaid failure to deposit penalty figured on
state(s) that you were required to your average liability.

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