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unemployment tax, you must pay FUTA tax at the 6.2% (.062)

Example for successor employers:

rate. For example, if your state unemployment tax law excludes

wages paid to corporate officers or employees in specific

During the calendar year, the predecessor employer paid $5,000 to

occupations, and the only wages you paid were to corporate

Employee A. You acquired the predecessor’s business. After the

officers or employees in those specific occupations, you must

acquisition, you employed Employee A and paid Employee A an

pay FUTA tax on those wages at the full FUTA rate of 6.2%

additional $3,000 in wages. None of the amounts paid to Employee A

(.062). When you figured the FUTA tax before adjustments on

were payments exempt from FUTA tax.

line 8, it was based on the maximum allowable credit (5.4%) for

state unemployment tax payments. Because you did not pay

$5,000 Wages paid by predecessor employer

state unemployment tax, you do not have a credit and must

+ 3,000 Wages paid by you

figure this adjustment.

$8,000 Total payments to Employee A. You would include this

amount on line 3.

If line 9 applies to you, lines 10 and 11 do not apply to you.

Therefore, leave lines 10 and 11 blank. Do not fill out the

$8,000 Total payments to Employee A

worksheet in the instructions or Part 2, Schedule A (Form 940).

– 7,000 FUTA wage base

$1,000 Payments made to Employee A in excess of $7,000.

10. If SOME of the taxable FUTA wages you paid

were excluded from state unemployment tax,

$1,000 Payments made to Employee A in excess of $7,000.

OR you paid ANY state unemployment tax late...

+ 5,000 Taxable FUTA wages paid by predecessor employer

You must fill out the worksheet on the next page if:

$6,000 You would include this amount on line 5.

•

Some of the taxable FUTA wages you paid were excluded

from state unemployment, or

6. Subtotal

•

Any of your payments of state unemployment tax were late.

To figure your subtotal, add the amounts on lines 4 and 5 and

The worksheet takes you step by step through the process of

enter the result on line 6.

figuring your credit. On page 9, you’ll find an example of how to

use it. Do not complete the worksheet if line 9 applied to you

line 4

(see instructions above).

+ line 5

line 6

Before you can properly fill out the worksheet, you will

need to gather the following information:

•

7. Total taxable FUTA wages

Taxable FUTA wages (from line 7 of Form 940),

•

Taxable state unemployment wages (state and federal wage

To figure your total taxable FUTA wages, subtract line 6 from

bases may differ),

line 3 and enter the result on line 7.

•

The experience rates assigned to you by the states where

you paid wages,

line 3

•

− line 6

The amount of state unemployment taxes you paid on time

line 7

(On time means that you paid the state unemployment taxes by

the due date for filing Form 940.), and

•

8. FUTA tax before adjustments

The amount of state unemployment taxes you paid late. (Late

means after the due date for filing Form 940.)

To figure your total FUTA tax before adjustments, multiply line 7

by .008 and enter the result on line 8.

Do not include any penalties, interest, or unemployment

line 7

taxes deducted from your employees’ pay in the amount

x .008

of state unemployment taxes. Also, do not include as

CAUTION

line 8

state unemployment taxes any special administrative taxes or

voluntary contributions you paid to get a lower assigned

Part 3: Determine Your Adjustments

experience rate or any surcharges, excise taxes, or

employment and training taxes. (These items are generally

listed as separate items on the state’s quarterly wage report.)

If any line in Part 3 does not apply, leave it blank.

9. If ALL of the FUTA wages you paid were

For line 3 of the worksheet:

•

excluded from state unemployment tax. . .

If any of the experience rates assigned to you were less than

5.4% for any part of the calendar year, you must list each

If all of the FUTA wages you paid were excluded from state

assigned experience rate separately on the worksheet.

unemployment tax, multiply line 7 by .054 and enter the result

•

If you were assigned six or more experience rates that were

on line 9.

less than 5.4% for any part of the calendar year, you must use

another sheet to figure the additional credits and then include

line 7

those additional credits in your line 3 total.

x .054

line 9

After you complete the worksheet, enter the amount from

If you were not required to pay state unemployment tax

line 7 of the worksheet on line 10 of Form 940. Do not attach

because all of the wages you paid were excluded from state

the worksheet to your Form 940. Keep it with your records.

-7-

Instructions For Form 940 - Employer'S Annual Federal Unemployment (Futa) Tax Return - 2009 Page 7

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