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Only taxpayers who made late contributions should

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

complete the worksheet below.

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

Tax on page 3.

You may pay the amount shown on line 9 using

Worksheet for Credit Computation if Any State

TIP

EFTPS. If you do so, file your return using the

Contributions Were Paid After the Due Date for Filing

“Return without payment” address under Where

Form 940

To File on page 3. Do not complete or file Form 940-V,

A. Enter the amount from Form 940, Part II,

Payment Voucher.

line 2 . . . . . . . . . . . . . . . . . . . . . . . . . .

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

B. Enter the amount from Form 940, Part II,

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

line 3b, if any . . . . . . . . . . . . . . . . . . . .

return only on written request.

C. Subtract line B from line A. If zero or less,

enter -0- . . . . . . . . . . . . . . . . . . . . . . . .

Part III. Record of Quarterly Federal

D. Enter total contributions paid to the

state(s) after the Form 940 due date . . .

Unemployment Tax Liability

E. Enter the smaller of line C or D . . . . . . .

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

F. Multiply line E by .90 (90%) . . . . . . . . . .

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

G. Add lines B and F . . . . . . . . . . . . . . . . .

three quarters, multiply by .008 that part of the first

H. Enter the smaller of the amount on line G

$7,000 of each employee’s annual wages you paid

or A here and on Form 940, Part II, line 4

during the quarter. (However, if any part of the wages

subject to FUTA is exempt from state unemployment tax,

Example of late state contributions. You paid

you may have to figure more than the tax using the .008

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

rate.) Enter the result in the columns for the first through

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

third quarters.

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

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

To figure your FUTA tax for the fourth quarter

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

(including any tax from Part I, line 6), complete Form 940

contributions on time, you would have been allowed an

through Part II, line 7. Enter the amount from Part II, line

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

7 in the “Total for year” column. Subtract the sum of the

Therefore, the credit for the late contributions is limited to

amounts shown in columns one through three from the

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

amount shown in “Total for year” column and enter the

result in the column for the fourth quarter. For example, if

the amounts in columns one through three each show

A. Enter the amount from Form 940, Part II,

$200 and Part II, line 7 shows $900, enter $900 in the

line 2 . . . . . . . . . . . . . . . . . . . . . . . . . .

$2,000

“Total for year” column. Then subtract $600 ($200 + $200

B. Enter the amount from Form 940, Part II,

+ $200) from the $900 and enter $300 ($900 - $600) in

line 3b, if any . . . . . . . . . . . . . . . . . . . .

1,500

the column for the fourth quarter FUTA tax liability.

C. Subtract line B from line A. If zero or

less, enter -0- . . . . . . . . . . . . . . . . . . . .

500

Record your FUTA tax liability based on when you pay

D. Enter total contributions paid to the

wages, not on when you make a tax deposit. For

state(s) after the Form 940 due date . . .

1,000

example, if you pay wages on March 28, your FUTA tax

E. Enter the smaller of line C or D . . . . . . .

500

on those wages is $200, and you deposit the $200 on

F. Multiply line E by .90 (90%) . . . . . . . . . .

450

April 30, you would record that $200 in the first quarter,

G. Add lines B and F . . . . . . . . . . . . . . . . .

1,950

not in the second.

H. Enter the smaller of the amount on line

Example. You had two employees and paid each

G or A here and on Form 940, Part II,

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

line 4 . . . . . . . . . . . . . . . . . . . . . . . . . .

1,950

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

the fourth quarter. (None of these payments were exempt

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

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

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

940, Part II, line 4. This is the allowable credit for your

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

contributions to the state unemployment fund.

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

Lines 5 and 6 — Credit allowable. Enter the amount

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

from Part I, line 6 on Part II, line 5. Subtract this amount

maximum amount subject to FUTA tax for each

from Part II, line 4. The result on line 6 is your allowable

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

credit for contributions to the state.

quarter. Because you paid each employee more than

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

Line 9 — Balance due. Make your check or money

the column for the third quarter and $112 (from Part II,

order payable to the “United States Treasury.” Write your

line 7) in the“Total for year” column. Enter zero ($112 -

EIN, “Form 940,” and “2004” on your check or money

$64 - $48 - 0) in the column for the fourth quarter.

order. Enter the amount of your payment on Form 940-V

at the bottom of Form 940. If the employer information is

Third-Party Designee. If you want to allow any

not preprinted on the payment voucher, enter the

individual, corporation, firm, organization, or partnership

requested information. Make certain that the entity

to discuss your 2004 Form 940 with the IRS, check the

information above line A is also properly completed.

“Yes” box in the Third-Party Designee section of the

-7-

Instructions For Form 940 - Employer'S Annual Federal Unemployment (Futa) Tax Return - 2004 Page 7

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