Schedule A (Form 940): Multi-State Employer And Credit Reduction Information - 2014 Page 2

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Instructions for Schedule A (Form 940) for 2014:
860412
Multi-State Employer and Credit Reduction Information
Specific Instructions: Completing Schedule A
Step 1. Place an “X” in the box of every state (including the
Note. Do not enter your state unemployment wages in the FUTA
District of Columbia, Puerto Rico, and the U.S. Virgin
Taxable Wages box.
Islands) in which you had to pay state unemployment taxes
Then multiply the total FUTA taxable wages by the reduction
this year, even if the state's credit reduction rate is zero.
rate.
Note. Make sure that you have applied for a state reporting
Enter your total in the Credit Reduction box at the end of the
number for your business. If you do not have an unemployment
line.
account in a state in which you paid wages, contact the state
unemployment agency to receive one. For a list of state
Step 3. Total credit reduction
unemployment agencies, visit the U.S. Department of Labor's
To calculate the total credit reduction, add up all of the Credit
website at
Reduction boxes and enter the amount in the Total Credit
agencies.asp.
Reduction box.
The table below provides the two-letter postal abbreviations
Then enter the total credit reduction on Form 940, line 11.
used on Schedule A.
Example 1
Postal
Postal
State
Abbreviation
State
Abbreviation
You paid $20,000 in wages to each of three employees in State A. State
A is subject to credit reduction at a rate of .003 (.3%). Because you paid
AL
Montana
MT
Alabama
wages in a state that is subject to credit reduction, you must complete
Schedule A and file it with Form 940.
Alaska
AK
Nebraska
NE
Arizona
AZ
Nevada
NV
Total payments to all employees in State A
.
.
.
.
.
. $60,000
Arkansas
AR
New Hampshire
NH
Payments exempt from FUTA tax
California
CA
New Jersey
NJ
(see the Instructions for Form 940) .
.
.
.
.
.
.
.
.
.
$0
Colorado
CO
New Mexico
NM
Connecticut
CT
New York
NY
Total payments made to each employee in
excess of $7,000 (3 x ($20,000 - $7,000)) .
.
.
.
.
.
. $39,000
Delaware
DE
North Carolina
NC
District of Columbia
DC
North Dakota
ND
Total FUTA taxable wages you paid in State A entered in
the FUTA Taxable Wages box ($60,000 - $0 - $39,000) .
.
. $21,000
Florida
FL
Ohio
OH
Credit reduction rate for State A
.
.
.
.
.
.
.
.
.
. .003
Georgia
GA
Oklahoma
OK
Total credit reduction for State A ($21,000 x .003)
.
.
.
.
. $63
Hawaii
HI
Oregon
OR
Idaho
ID
Pennsylvania
PA
Caution. Do not include in the FUTA Taxable Wages box wages in
Illinois
IL
Rhode Island
RI
excess of the $7,000 wage base for each employee subject to state
unemployment insurance in the credit reduction state. The credit
Indiana
IN
South Carolina
SC
reduction applies only to FUTA taxable wages that were also subject to
Iowa
IA
South Dakota
SD
state unemployment tax.
Kansas
KS
Tennessee
TN
Kentucky
KY
Texas
TX
In this case, you would write $63.00 in the Total Credit Reduction box
and then enter that amount on Form 940, line 11.
Louisiana
LA
Utah
UT
Example 2
Maine
ME
Vermont
VT
Maryland
MD
Virginia
VA
You paid $48,000 ($4,000 a month) in wages to Employee A and no
payments were exempt from FUTA tax. Employee A worked in State B
Massachusetts
MA
Washington
WA
(not subject to credit reduction) in January and then transferred to State
Michigan
MI
West Virginia
WV
C (subject to credit reduction) on February 1. Because you paid wages
Minnesota
MN
Wisconsin
WI
in more than one state, you must complete Schedule A and file it with
Mississippi
MS
Wyoming
WY
Form 940.
Missouri
MO
Puerto Rico
PR
The total payments in State B that are not exempt from FUTA tax are
U.S. Virgin Islands
VI
$4,000. Since this payment to Employee A does not exceed the $7,000
Step 2. You are subject to credit reduction if you paid FUTA
FUTA wage base, the total FUTA taxable wages paid in State B are
taxable wages that were also subject to state
$4,000.
unemployment taxes in any state listed that has a credit
The total payments in State C that are not exempt from FUTA tax are
reduction rate greater than zero.
$44,000. However, $4,000 of FUTA taxable wages was paid in State B
with respect to Employee A. Therefore, the total FUTA taxable wages
If you paid FUTA taxable wages that were also subject to state
with respect to Employee A in State C are $3,000 ($7,000 (FUTA wage
unemployment taxes in any state that is subject to credit
base) - $4,000 (total FUTA taxable wages paid in State B)). Enter $3,000
reduction, find the line for each state.
in the FUTA Taxable Wages box, multiply it by the Reduction Rate, and
In the FUTA Taxable Wages box, enter the total FUTA taxable
then enter the result in the Credit Reduction box.
wages that you paid in that state. (The FUTA wage base for all
Attach Schedule A to Form 940 when you file your return.
states is $7,000.) However, do not include in the FUTA Taxable
Wages box wages that were excluded from state unemployment
tax. For example, if you paid $5,000 in FUTA taxable wages in a
credit reduction state but $1,000 of those wages were excluded
from state unemployment tax, report $4,000 in the FUTA
Taxable Wages box for that state.
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