Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return
Form 940 reports federal unemployment (FUTA) tax, paid entirely by the employer, once a year on the first $7,000 of each employee’s wages.
This is the genuine IRS PDF, unmodified. Source: IRS official page.
What is 940?
Form 940 computes your annual FUTA liability: 6.0% on the first $7,000 of wages per employee, reduced by a credit of up to 5.4% for state unemployment taxes paid on time, leaving most employers at 0.6%. Employers in credit reduction states lose part of that credit and reconcile it on Schedule A (Form 940).
The return is due January 31, though deposits are required quarterly whenever accumulated liability passes $500.
Who files 940?
- Employers who paid $1,500 or more in wages in any calendar quarter
- Employers who had at least one employee for some part of a day in 20 or more different weeks of the year
- Household and agricultural employers under their own separate thresholds
How to fill out 940
- Enter your EIN and business details, and your state unemployment account information.
- Report total payments, exempt payments, and payments over the $7,000 per-employee base.
- Apply the state credit lines to reach your FUTA tax for the year.
- Reconcile against quarterly deposits, then download, sign, and file by January 31.
Quick fill 940 on this page
Prefer to see the form itself while you type? Open 940 in the editor to fill it on the actual pages, add a signature, and download.
Frequently asked questions
Do employees pay any of this?
No. FUTA is purely an employer tax, never withheld from wages.
Why is my rate not just 0.6%?
If your state borrowed federal unemployment funds and has not repaid them, it is a credit reduction state, and Schedule A adds back part of the credit.