Instructions For Form 940 - Employer'S Annual Federal Unemployment (Futa) Tax Return - 2008


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Department of the Treasury
Internal Revenue Service
Instructions for Form 940
Employer’s Annual Federal Unemployment (FUTA) Tax Return
However, do not use a credit card to pay taxes that are
Section references are to the Internal Revenue Code unless
required to be deposited. (See When Must You Deposit Your
otherwise noted.
FUTA Tax? on page 3.) For more information on paying your
taxes with a credit card, visit the IRS website at
What’s New
and click on the electronic irs link.
Photographs of missing children. IRS is a proud partner
Disregarded entities and QSubs. Treasury Decision 9356,
with the National Center for Missing and Exploited Children.
effective for wages paid on or after January 1, 2009, treats
Photographs of missing children selected by the Center may
eligible single-owner disregarded entities and qualified
appear in instructions on pages that would otherwise be blank.
subchapter S subsidiaries (QSubs) as separate entities for
You can help bring these children home by looking at the
employment tax purposes. Business owners may no longer
photographs and calling 1-800-THE-LOST (1-800-843-5678) if
elect to treat the related employment taxes as a liability of the
you recognize a child.
owner. Instead, report the employment taxes on employment
tax returns filed by the disregarded entity or QSub. For more
How Can You Get More Help?
information, see Disregarded entities and qualified subchapter
If you want more information about this form, see Pub. 15
S subsidiaries in the Introduction section of Pub. 15 (Circular
(Circular E), visit our website at , or call
E), Employer’s Tax Guide.
No credit reduction states. The U.S. Department of Labor
For a list of related employment tax topics, visit the IRS
(DOL) has announced that there are no credit reduction states
website at and click on the “Businesses” tab.
for tax year 2008. Therefore, do not complete lines 2 and 11.
Paid preparers are required to sign Form 940. A preparer
must sign Form 940 and provide the information requested in
General Instructions:
the Paid Preparer’s Use Only section of Part 7 if the preparer:
was paid to prepare Form 940, and
Understanding Form 940
is not an employee of the filing entity.
The preparer must give you a copy of the return in addition to
What’s the Purpose of Form 940?
the copy to be filed with the IRS.
FUTA rate for 2009. The 6.2% FUTA tax rate scheduled to
Use Form 940 to report your annual Federal Unemployment
decrease to 6.0% after December 31, 2008, has been extended
Tax Act (FUTA) tax. Together with state unemployment tax
by Public Law 110-343 through calendar year 2009.
systems, the FUTA tax provides funds for paying
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
These instructions give you some background information
your state unemployment agency. A contact list (for general
about the Form 940. They tell you who must file the form, how
information only) of state unemployment tax agencies is
to fill it out line by line, and when and where to file it.
provided on page 12.
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 2007 or 2008?
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 2007 or 20 or
Service at 1-800-555-4477, 1-800-733-4829 (TDD), or
more different weeks in 2008? 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 2008 because you made no payments to
Cat. No. 13660I


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