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
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.
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
percent, enter the wages that would have been subject to
state unemployment tax if the zero percent rate had not
Column (d). Enter the beginning and ending dates of
the experience rate shown in column (e).