Instructions For Form 940 - Employer'S Annual Federal Unemployment (Futa) Tax Return - 2005


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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.
If an envelope was received with the tax package, please
What’s New
use it. Otherwise, see Where To File on page 3.
Credit reduction state. A state that has not repaid
Signature on Form 940. Only an authorized individual
money it borrowed from the federal government to pay
may sign Form 940. See Signature on page 8.
unemployment benefits is a “credit reduction state.” The
State unemployment information. You must contact
U.S. Department of Labor determines these states. If an
your state unemployment tax office to receive your state
employer pays wages that are subject to the
reporting number, state experience rate, and details
unemployment tax laws of a credit reduction state, that
about your state unemployment tax obligations.
employer must pay additional federal unemployment tax
Worksheet for computing the Part II, line 4 credit if
when filing its Form 940. Employers in a credit reduction
state contributions were paid late. Filers who made
state cannot file Form 940-EZ.
contributions to their state unemployment fund after the
For 2005, New York is a credit reduction state. If you
due date for filing Form 940 should complete the
paid any wages that are subject to the unemployment
worksheet provided in the instructions for Part II, line 4,
compensation laws of the State of New York, you are not
on page 7, to compute the allowable credit. Do not report
allowed .006 of the regular .054 credit. Use Form 940,
such contributions in Part II, line 3, column (i) or on line
Part I, line 7 to show this tax. If you must complete Form
3b. Any credit allowed for such state contributions will
940, Part III, Record of Quarterly Federal Unemployment
appear on line 4.
Tax Liability, include any additional tax from Part I, line 7
Electronic Filing and Payment
in the fourth quarter column and include the amount with
your fourth quarter tax deposit.
Now, more than ever before, businesses can enjoy the
Payment of state unemployment taxes. A state
benefits of filing and paying their federal taxes
agency’s waiver of “de minimis” balances due on your
electronically. Whether you rely on a tax professional or
state unemployment tax returns will not affect the amount
handle your own taxes, IRS offers you convenient
or timeliness of your state unemployment contributions
programs to make it easier.
for FUTA purposes.
Spend less time and worry on taxes and more time
Credit card payments. Effective January 2006, you
running your business. Use e-file and Electronic Federal
may pay your FUTA tax shown on Part II, line 9 using a
Tax Payment System (EFTPS) to your benefit.
major credit card. For information on paying your taxes
For e-file, visit for additional information.
with a credit card, visit the IRS website at
For EFTPS, visit or call EFTPS
and type “e-pay” in the search box.
Customer Service at 1-800-555-4477.
Alternative signature method. Effective with returns
Use electronic options available from IRS and make
filed after June 30, 2005, corporate officers or duly
filing and paying taxes easier.
authorized agents may sign Form 940 by rubber stamp,
Photographs of Missing Children
mechanical device, or computer software program. For
details and required documentation, see Rev. Proc.
The Internal Revenue Service is a proud partner with the
2005-39. You can find Rev. Proc. 2005-39 on page 82 of
National Center for Missing and Exploited Children.
Internal Revenue Bulletin 2005-28 at /pub/
Photographs of missing children selected by the Center
may appear in instructions on pages that would otherwise
be blank. You can help bring these children home by
General Instructions
looking at the photographs and calling 1-800-THE-LOST
(1-800-843-5678) if you recognize a child.
Purpose of Form
Additional employment tax information. Visit the IRS
Use Form 940 (or Form 940-EZ) to report your annual
website at and type “Employment Tax” in the
Federal Unemployment Tax Act (FUTA) tax. FUTA tax,
search box for a list of employment tax topics. For
together with state unemployment systems, provides for
telephone help, call the IRS toll free at 1-800-829-4933.
payments of unemployment compensation to workers
Mailing address change. You may need to mail Form
who have lost their jobs. Most employers pay both
940 to a different address than in previous years because
federal and state unemployment taxes. Only the
the IRS has changed the filing location for several areas.
employer pays FUTA tax. Do not collect or deduct it
Cat. No. 13660I


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