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.
of Form 940. You may use it instead of Form 940 to
report your annual FUTA tax if —
1. You paid unemployment contributions to only one
What’s New for 2001?
2. You paid all state unemployment contributions by
Electronic filing of Form 940. Form 940 can now be
January 31, 2002 (February 11, 2002, if you deposited all
filed electronically. See Magnetic Media and Electronic
FUTA tax when due), and
Reporting on page 3.
3. All wages that were taxable for FUTA tax were also
taxable for your state’s unemployment tax. If, for
Third party designee. You can now allow an employee
example, you paid wages to corporate officers (these
or paid preparer to resolve certain tax issues with the
wages are taxable for FUTA tax) in a state that exempts
IRS. See Third party designee on page 4 for more
corporate officers’ wages from its unemployment tax, you
cannot use Form 940-EZ.
Items To Note
A successor employer claiming a credit for state
Electronic deposit requirement. You may be required
unemployment contributions paid by the prior
to deposit Federal taxes, such as employment tax, excise
employer must file Form 940.
tax, and corporate income taxes, electronically using the
Electronic Federal Tax Payment System (EFTPS). See
Electronic deposit requirement on page 3 for details.
When To File
State unemployment information. You must contact
File Form 940 for 2001 by January 31, 2002. However, if
your state unemployment tax office to receive your state
you deposited all FUTA tax when due, you may file on or
reporting number, state experience rate, and details
before February 11, 2002. Your return will be considered
about your state unemployment tax obligations.
timely filed if it is properly addressed and mailed First
Class or sent by an IRS designated delivery service by
Worksheet for computing the Part II, line 6 credit if
the due date. See Circular E, Employer’s Tax Guide
state contributions were paid late. Filers who made
(Pub. 15), for a list of designated delivery services. Also
contributions to their state unemployment fund after the
see Where To File on page 2.
due date for filing Form 940 should complete the
worksheet provided in the instructions for Part II, line 6,
Private delivery services cannot deliver items to
on page 5, to compute the allowable credit. Do not report
such contributions in Part II, line 3, column (i) or on line
3b. Any credit allowed for such state contributions will
appear on line 6.
Who Must File
Photographs of Missing Children
Except as noted below, you must file Form 940 if Test 1
The Internal Revenue Service is a proud partner with the
or Test 2 applies.
National Center for Missing and Exploited Children.
Test 1. You paid wages of $1,500 or more in any
Photographs of missing children selected by the Center
calendar quarter in 2000 or 2001.
may appear in instructions on pages that would otherwise
be blank. You can help bring these children home by
Test 2. You had one or more employees for at least
looking at the photographs and calling 1-800-THE-LOST
some part of a day in any 20 or more different weeks in
(1-800-843-5678) if you recognize a child.
2000 or 20 or more different weeks in 2001.
Count all regular, temporary, and part-time employees.
Purpose of Form
A partnership should not count its partners. If a business
Use Form 940 (or 940-EZ) to report your annual Federal
changes hands during the year, each employer who
Unemployment Tax Act (FUTA) tax. FUTA tax, together
meets Test 1 or 2 must file. For purposes of Test 1 or
with state unemployment systems, provides for payments
Test 2 only, do not include wages paid by the prior (or
of unemployment compensation to workers who have lost
subsequent) employer. But see Successor employer on
their jobs. Most employers pay both Federal and state
unemployment taxes. Only the employer pays FUTA
Household employers. File a FUTA tax return only if
tax. Do not collect or deduct it from your employees’
you paid total cash wages of $1,000 or more (for all
wages. The tax applies to the first $7,000 you pay each
household employees) in any calendar quarter in 2000 or
employee in a year after subtracting any exempt
2001 for household work in a private home, local college
payments. The $7,000 amount is the Federal wage base.
club, or local chapter of a college fraternity or sorority.
Your state wage base may be different.
Individuals, estates, and trusts that owe FUTA tax for
Form 940-EZ, Employer’s Annual Federal
household work in a private home, in most cases, must
Unemployment (FUTA) Tax Return, is a simpler version
file Schedule H (Form 1040), Household Employment
Cat. No. 13660I