Department of the Treasury
Internal Revenue Service
Instructions for Form 940
Employer’s Annual Federal Unemployment
(FUTA) Tax Return
Section references are to the Internal Revenue Code unless otherwise noted.
looking at the photographs and calling 1-800-THE-LOST
(1-800-843-5678) if you recognize a child.
Items To Note
Purpose of Form
Use Form 940 (or Form 940-EZ) to report your annual
Electronic deposit requirement. You may be required
Federal Unemployment Tax Act (FUTA) tax. FUTA tax,
to deposit Federal taxes, such as employment tax, excise
together with state unemployment systems, provides for
tax, and corporate income taxes, electronically using the
payments of unemployment compensation to workers
Electronic Federal Tax Payment System (EFTPS). See
who have lost their jobs. Most employers pay both
Electronic deposit requirement on page 3 for details.
Federal and state unemployment taxes. Only the
Electronic filing option. File Form 940 electronically
employer pays FUTA tax. Do not collect or deduct it
and receive proof of filing acknowledgement. Electronic
from your employees’ wages. The tax applies to the first
payment options may also be available. Visit the IRS
$7,000 you pay each employee in a year after subtracting
website at for details.
any exempt payments. The $7,000 amount is the Federal
Enhanced Third Party Designee authority. The
wage base. Your state wage base may be different.
authority given to a representative when a filer completes
Form 940-EZ, Employer’s Annual Federal
the Third Party Designee section of Form 940 has been
Unemployment (FUTA) Tax Return, is a simpler version
enhanced and is now revocable. Third-party designees
of Form 940. You may use Form 940-EZ instead of Form
will now be able to exchange information with the IRS
940 to report your annual FUTA tax if —
concerning Form 940. They may also request and
You paid unemployment contributions to only one
receive written tax information relating to Form 940,
including copies of specific notices, correspondence, and
You paid all state unemployment contributions by
account transcripts. The named third-party designee may
February 2, 2004 (February 10, 2004, if you deposited all
now be any individual, corporation, firm, organization, or
FUTA tax when due), and
partnership. As a result, the enhanced Third Party
All wages that were taxable for FUTA tax were also
Designee authorization will be substantially equivalent to
taxable for your state’s unemployment tax. If, for
Form 8821, Tax Information Authorization. See Third
example, you paid wages to corporate officers (these
Party Designee on page 6 for details.
wages are taxable for FUTA tax) in a state that exempts
Mailing address change. You may need to mail Form
corporate officers’ wages from its unemployment tax, you
940 to a different address than in previous years because
cannot use Form 940-EZ.
the IRS has changed the filing location for several areas.
A successor employer claiming a credit for state
If an envelope was received with the tax package, please
unemployment contributions paid by the prior
use it. Otherwise, see Where To File on page 2.
employer must file Form 940.
Signature on Form 940. Only an authorized individual
may sign Form 940. See Signature on page 6.
When To File
State unemployment information. You must contact
File Form 940 for 2003 by February 2, 2004. However, if
your state unemployment tax office to receive your state
you deposited all FUTA tax when due, you may file on or
reporting number, state experience rate, and details
before February 10, 2004. Your return will be considered
about your state unemployment tax obligations.
timely filed if it is properly addressed and mailed First
Web-based application for an EIN. You may now apply
Class or sent by an IRS-designated delivery service by
for an employer identification number (EIN) online by
the due date. See Circular E (Pub. 15), Employer’s Tax
visiting the IRS website at See
Guide, for a list of designated delivery services. Also see
also Employer identification number (EIN) on page 4.
Where To File on page 2.
Worksheet for computing the Part II, line 6 credit if
Private delivery services cannot deliver items to
state contributions were paid late. Filers who made
contributions to their state unemployment fund after the
due date for filing Form 940 should complete the
worksheet provided in the instructions for Part II, line 6,
Who Must File
on page 5, to compute the allowable credit. Do not report
such contributions in Part II, line 3, column (i) or on line
Except as noted below, you must file Form 940 if Test 1
3b. Any credit allowed for such state contributions will
or Test 2 applies.
appear on line 6.
Test 1. You paid wages of $1,500 or more in any
calendar quarter in 2002 or 2003.
Photographs of Missing Children
Test 2. You had one or more employees for at least
The Internal Revenue Service is a proud partner with the
some part of a day in any 20 or more different weeks in
National Center for Missing and Exploited Children.
2002 or 20 or more different weeks in 2003.
Photographs of missing children selected by the Center
may appear in instructions on pages that would otherwise
Count all regular, temporary, and part-time employees.
be blank. You can help bring these children home by
A partnership should not count its partners. If a business
Cat. No. 13660I