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Part III — Record of Quarterly Federal

Only taxpayers who made late contributions should

complete the worksheet below.

Unemployment Tax Liability

Complete this part only if your FUTA tax in Part II,

Worksheet for Credit Computation if Any State

line 7, is over $100. To figure your FUTA tax for each

Contributions Were Paid After the Due Date for Filing

quarter, multiply by .008 that part of the first $7,000 of

Form 940

each employee’s annual wages you paid during the

quarter. Enter the result in the space for that quarter.

Enter the amount from Form 940,

Your “Total for year” must equal your total FUTA tax

Part II, line 2

shown in Part II, line 7.

Enter the amount from Form 940,

Record your FUTA tax based on when you pay wages,

Part II, line 3b, if any

not on when you deposit it. For example, if you pay

Subtract line B from line A. If zero or

wages on March 29, your FUTA tax on those wages is

less, enter -0-

$200, and you deposit the $200 on April 30, you would

Enter total contributions paid to the

record that $200 in the first quarter, not in the second.

state(s) after the Form 940 due date

Example. You had two employees and paid each

Enter the smaller of line C or D

employee $4,000 in the first quarter, $5,000 in the

Multiply line E by .90 (90%)

second quarter, $5,000 in the third quarter, and $5,000 in

Add lines B and F

the fourth quarter. (None of these payments were exempt

from FUTA tax.) For the first quarter, multiply .008 x

Enter the smaller of the amount on

line G or A here and on Form 940,

$8,000 (the amount paid to both employees), and enter

Part II, line 6

$64 in the space for the first quarter. For the second

quarter, multiply .008 only by $6,000 ($3,000 for each

employee— the amount remaining to reach the $7,000

Example of late state contributions. You paid

maximum amount subject to FUTA tax for each

$1,500 of state contributions by the Form 940 due date

employee), and enter $48 in the space for the second

and $1,000 after that date. Your maximum credit on Form

quarter. Because you paid each employee more than

940, Part II, line 2 is $2,000, and your tentative credit on

$7,000 by the end of the second quarter, enter zero in

line 3b is $1,500. The maximum credit less the tentative

the space for the third and fourth quarters. Enter $112 in

credit is $500. If you had paid the $1,000 state

the “Total for year” space.

contributions on time, you would have been allowed an

additional credit of only $500, not the full $1,000.

Privacy Act and Paperwork Reduction Act Notice.

Therefore, the credit for the late contributions is limited to

We ask for the information on this form to carry out the

90% of $500. You complete the worksheet as follows:

Internal Revenue laws of the United States. We need it to

figure and collect the right amount of tax. Chapter 23,

Federal Unemployment Tax Act, of Subtitle C,

Enter the amount from Form 940,

Employment Taxes, of the Internal Revenue Code

$2,000

Part II, line 2

imposes a tax on employers with respect to employees.

Enter the amount from Form 940,

This form is used to determine the amount of the tax that

1,500

Part II, line 3b, if any

you owe. Section 6011 requires you to provide the

Subtract line B from line A. If zero or

requested information if you are liable for FUTA tax under

500

less, enter -0-

section 3301. Section 6109 requires you to provide your

employer identification number (EIN).

Enter total contributions paid to the

1,000

state(s) after the Form 940 due date

Routine uses of this information include giving it to the

500

Department of Justice for civil and criminal litigation, and

Enter the smaller of line C or D

to cities, states, and the District of Columbia for use in

450

Multiply line E by .90 (90%)

administering their tax laws. If you fail to provide this

1,950

Add lines B and F

information in a timely manner, you may be subject to

Enter the smaller of the amount on

penalties and interest.

line G or A here and on Form 940,

You are not required to provide the information

1,950

Part II, line 6

requested on a form that is subject to the Paperwork

Reduction Act unless the form displays a valid OMB

Enter $1,950 from line H of the worksheet on Form

control number. Books or records relating to a form or its

940, Part II, line 6. This is the allowable credit for your

instructions must be retained as long as their contents

may become material in the administration of any Internal

contributions to the state unemployment fund.

Revenue law. Generally, tax returns and return

Line 9 — Balance due. Make your check or money

information are confidential, as required by section 6103.

order payable to the “United States Treasury.” Write

your EIN, “Form 940,” and “2001” on your check or

The time needed to complete and file this form will

money order. Enter the amount of the payment on Form

vary depending on individual circumstances. The

940-V at the bottom of Form 940. If the employer

estimated average time is: Recordkeeping—13 hr., 45

information is not preprinted on the payment voucher,

min.; Learning about the law or the form— 1 hr., 17

enter the requested information. (Make certain that the

min.; Preparing and sending the form to the IRS—

entity information above line A is properly completed.)

1 hr., 49 min.

If the amount on line 9 is under $1, you do not have to

If you have comments concerning the accuracy of

pay it. For payments over $100, see Depositing FUTA

these time estimates or suggestions for making this form

Tax on page 3.

simpler, we would be happy to hear from you. You can

write to the Tax Forms Committee, Western Area

Line 10 — Overpayment. If the amount on line 10 is

Distribution Center, Rancho Cordova, CA 95743-0001.

under $1, we will send a refund or apply it to your next

Do not send the tax form to this office. Instead, see

return only on written request.

Where To File on page 2.

-6-

Instructions For Form 940 - Employer'S Annual Federal Unemployment (Futa) Tax Return - 2001 Page 6

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