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Department of the Treasury

Internal Revenue Service

Instructions for Form 940

Employer’s Annual Federal Unemployment (FUTA) Tax Return

FUTA Tax? on page 3.) For more information on paying your

Section references are to the Internal Revenue Code unless

taxes with a credit card, visit the IRS website at

otherwise noted.

and click on the electronic irs link.

Photographs of missing children. IRS is a proud partner

What’s New

with the National Center for Missing and Exploited Children.

Photographs of missing children selected by the Center may

Credit reduction state. A state that has not repaid money it

appear in instructions on pages that would otherwise be blank.

borrowed from the federal government to pay unemployment

You can help bring these children home by looking at the

benefits is a “credit reduction state.” The Department of Labor

photographs and calling 1-800-THE-LOST (1-800-843-5678) if

determines these states. If an employer pays wages that are

you recognize a child.

subject to the unemployment tax laws of a credit reduction

state, that employer must pay additional federal unemployment

How Can You Get More Help?

tax when filing its Form 940.

If you want more information about this form, see Pub. 15

For 2009, Michigan is a credit reduction state. If you paid

(Circular E), visit our website at , or call

any wages that are subject to the unemployment compensation

1-800-829-4933.

laws of the State of Michigan, you are not allowed .003 of the

For a list of related employment tax topics, visit the IRS

regular .054 credit. Use Schedule A (Form 940), Part 2, to

website at and click on the “Businesses” tab.

compute the tax. For more information, see the Specific

Instructions on page 2 of Schedule A (Form 940)

or visit .

General Instructions:

Disregarded entities and qualified subchapter S

subsidiaries (Qsubs). For wages paid on or after January 1,

Understanding Form 940

2009, business entities that are disregarded as separate from

their owner, including qualified subchapter S subsidiaries, are

What’s the Purpose of Form 940?

required to withhold and pay employment taxes and file

employment tax returns using the name and EIN of the

Use Form 940 to report your annual Federal Unemployment

disregarded entity. For more information, see Disregarded

Tax Act (FUTA) tax. Together with state unemployment tax

entities on page 5.

systems, the FUTA tax provides funds for paying

Reminders

unemployment compensation to workers who have lost their

jobs. Most employers pay both a federal and a state

State unemployment information. You are no longer

unemployment tax. Only employers pay FUTA tax. Do not

required to list your state reporting number(s) on Form 940.

collect or deduct FUTA tax from your employees’ wages.

When you registered as an employer with your state, the state

The FUTA tax applies to the first $7,000 you pay to each

assigned you a state reporting number. If you do not have a

employee during a calendar year after subtracting any

state unemployment account and state experience tax rate, or if

payments exempt from FUTA tax.

you have questions about your state account, you must contact

your state unemployment agency. A contact list (for general

These instructions give you some background information

information only) of state unemployment tax agencies is

about the Form 940. They tell you who must file the form, how

provided on page 12.

to fill it out line by line, and when and where to file it.

You can file and pay electronically. Using electronic options

Who Must File Form 940?

available from the Internal Revenue Service (IRS) can make

filing a return and paying your federal tax easier. You can use

Except as noted below, if you answer “Yes” to either one of

IRS e-file to file a return and Electronic Federal Tax Payment

these questions, you must file Form 940:

System (EFTPS) to make deposits or pay in full whether you

•

Did you pay wages of $1,500 or more to employees in any

rely on a tax professional or prepare your own taxes.

•

calendar quarter during 2008 or 2009?

For IRS e-file, visit for additional information.

•

Did you have one or more employees for at least some part

For EFTPS, visit or call EFTPS Customer

of a day in any 20 or more different weeks in 2008 or 20 or

Service at 1-800-555-4477, 1-800-733-4829 (TDD), or

more different weeks in 2009? Count all full-time, part-time, and

1-800-244-4829 (Spanish).

temporary employees. However, if your business is a

Electronic funds withdrawal (EFW). If you file Form 940

partnership, do not count its partners.

electronically, you can e-file and e-pay (electronic funds

If your business was sold or transferred during the year,

withdrawal) the balance due in a single step using tax

each employer who answered “Yes” to at least one question

preparation software or through a tax professional. However,

above must file Form 940. However, do not include any wages

do not use EFW to make federal tax deposits. For more

paid by the predecessor employer on your Form 940 unless you

information on paying your taxes using EFW, visit the IRS

are a successor employer. For details, see Successor employer

website at and click on the electronic irs link. A fee

under Type of Return on page 5.

may be charged to file electronically.

You can pay your balance due by credit card. You may pay

If you received a preprinted Form 940 and are not liable for

your FUTA tax shown on line 14 using a major credit card.

FUTA tax for 2009 because you made no payments to

However, do not use a credit card to pay taxes that are

employees in 2009, check box c in the top right corner of the

required to be deposited. (See When Must You Deposit Your

form. Then go to Part 7, sign the form, and file it with the IRS.

Cat. No. 13660I

Instructions For Form 940 - Employer'S Annual Federal Unemployment (Futa) Tax Return - 2009

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