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Line 5 — Total taxable wages. This is the total amount

Column (e). Enter your state experience rate — the

subject to FUTA tax. Use this amount in Part II to

rate the state assigned to you for paying your state

compute the gross FUTA tax and the maximum credit.

unemployment tax. This rate may change based on your

“experience” with the state unemployment fund, for

Line 6 — Additional tax resulting from credit

example, because of unemployment compensation paid

reduction. Enter the amount of wages included on line 5

to your former employees. If you do not know your

subject to the unemployment compensation laws of the

experience rate, contact your state unemployment office.

State of New York. The wages shown on line 6 cannot

The state experience rate can be stated as a percentage

exceed the total taxable wages shown on line 5. If no

or as a decimal (for example, 2.7% or .027).

wages are subject to these laws, enter “-0-” on line 6.

Multiply the wages by the rate shown.

Column (f). Multiply the amount in column (c) by .054.

Column (g). Multiply the amount in column (c) by the

The amount of this adjustment increases your FUTA

rate in column (e).

tax by reducing the credit otherwise allowable against the

FUTA tax for contributions made to state unemployment

Column (h). Subtract column (g) from column (f). If

funds. However, the increase cannot be more than the

zero or less, enter zero. This additional credit is the

credit otherwise allowable.

difference between 5.4% and your state experience rate.

Column (i). Enter the contributions you actually paid

Part II. Tax Due or Refund

to the state unemployment fund by the due date for filing

your Form 940. Do not include amounts you are required

Line 1 — Gross FUTA tax. Multiply the total taxable

to pay but have not paid by the Form 940 due date

wages from Part I, line 5, by .062. This is the maximum

(January 31 or February 10 as explained under When To

amount of FUTA tax.

File on page 2). If you are filing Form 940 after the due

Line 2 — Maximum credit. Multiply the total taxable

date, include only payments made by the return due

wages from Part I, line 5, by .054. This is the maximum

date, and see the instructions and worksheet under Line

credit against FUTA tax for state contributions.

4 — Credit below. If you are claiming excess credits

Line 3 — Computation of tentative credit. You must

as payments of state unemployment contributions, attach

complete all applicable columns to receive any credit.

a copy of the letter from your state. Do not include any

Your state will provide an experience rate to you. If you

penalties, interest, or special administrative taxes (such

have been assigned an experience rate of zero percent

as surcharges, employment and training taxes, excise

or more, but less than 5.4%, for all or part of the year,

tax, and assessments, which are generally listed as a

use columns (a) through (i). If you have not been

separate item on the state’s quarterly wage report) not

assigned any experience rate, use columns (a), (b), (c),

included in the experience rate assigned to you.

and (i) only. If you have been assigned a rate of 5.4% or

Line 3a — Totals. Enter the totals of columns (h)

higher, use columns (a), (b), (c), (d), (e), and (i) only. If

and (i).

you were assigned an experience rate for only part of the

Line 3b — Total tentative credit. Add line 3a, columns

year or the rate was changed during the year, complete a

(h) and (i). As noted above, column (i) includes only

separate line for each rate period.

payments to your state unemployment fund that you

If you need additional lines, attach a separate

made by the due date for filing Form 940. Payments

statement with a similar format. Also, if you are a

made after the due date are eligible for a reduced credit

successor employer, see Special credit for successor

and will appear on line 4 as described below.

employers, on page 3.

Line 4 — Credit. This is the credit allowable for your

Column (a). Enter the two-letter abbreviation for the

payments to state unemployment funds. If you made no

state(s) to which you were required to pay contributions

late state contributions, enter the smaller of the amount

(including the District of Columbia, Puerto Rico, and the

from Part II, line 2 or line 3b. If you do not have to make

U.S. Virgin Islands).

payments to the state, enter zero on this line.

Column (b). Enter the state reporting number

If any state contributions were made after the

assigned to you when you registered as an employer with

Form 940 due date (January 31 or February 10 as

each state. Failure to enter the correct number may result

explained under When To File on page 2), your

in unnecessary correspondence.

CAUTION

credit for late contributions is limited to 90% of the

Column (c). Enter the state taxable payroll on which

amount that would have been allowable as a credit if

you must pay state unemployment taxes for each state

such contributions were paid on or before the Form 940

shown in column (a). If your experience rate is zero

due date.

percent, enter the wages that would have been subject to

state unemployment tax if the zero percent rate had not

been granted.

Column (d). Enter the beginning and ending dates of

the experience rate shown in column (e).

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Instructions For Form 940 - Employer'S Annual Federal Unemployment (Futa) Tax Return - 2004 Page 6

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