Instructions For Form 940 - Employer'S Annual Federal Unemployment (Futa) Tax Return - 2003 Page 3


Penalties, interest, or special administrative taxes not
How to deposit. If you choose not to enroll in EFTPS
included in the contribution rate the state assigned to
and are not required to use EFTPS (see Electronic
deposit requirement below), use Form 8109, Federal
Voluntary contributions you paid to get a lower
Tax Deposit Coupon, when you make each tax deposit.
assigned rate.
The IRS will pre-enroll you in EFTPS when you apply for
an employer identification number (EIN). Follow the
Additional credit. You may receive an additional credit
instructions in your EIN Package to activate your
if you have a state experience rate lower than 5.4%
enrollment and begin making your tax deposits.
(.054). This applies even if your rate varies during the
year. This additional credit is the difference between your
For new employers, if you would like to receive a
actual state payments and the amount you would have
Federal Tax Deposit (FTD) coupon booklet call
been required to pay at 5.4%. See Line 3 –Computation
1– 800 –829 – 4933. Allow 5 to 6 weeks for delivery.
of tentative credit on page 5.
Make your deposits with an authorized financial
The total credit allowable may not be more than 5.4%
institution (e.g., a commercial bank that is qualified to
of the total taxable FUTA wages.
accept Federal tax deposits). To avoid a possible
penalty, do not mail deposits directly to the IRS. Records
Special credit for successor employers. A successor
of your deposits will be sent to the IRS for crediting to
employer is an employer who received a unit of another
your business accounts.
employer’s trade or business or all or most of the
property used in the trade or business of another
Electronic deposit requirement. You must make
employer. Immediately after the acquisition, the
electronic deposits of all depository taxes (such as
successor employer must employ one or more individuals
employment tax, excise tax, and corporate income tax)
who were employed by the previous owner.
using the Electronic Federal Tax Payment System
(EFTPS) in 2004 if:
You may be eligible for a credit based on the state
The total deposits of such taxes in 2002 were more
unemployment contributions paid by the previous
than $200,000 or
employer. You may claim these credits if you are a
You were required to use EFTPS in 2003.
successor employer and acquired a business in 2003
If you are required to use EFTPS and use Form 8109
from a previous employer who was not required to file
instead, you may be subject to a 10% penalty. If you are
Form 940 (or Form 940-EZ) for 2003. If you are eligible
not required to use EFTPS, you may participate
to take this credit, you must file Form 940; you may
voluntarily. To enroll in or get more information about
not use Form 940-EZ. See section 3302(e). Enter in
EFTPS, call 1-800-555-4477 or 1-800-945-8400, or to
Part II, line 3, columns (a) through (i), the information of
enroll online, visit the EFTPS website at
the previous employer as if you paid the amounts.
If the previous employer was required to file Form 940
For deposits made by EFTPS to be on time, you
(or Form 940-EZ), see Successor employer on page 4.
must initiate the transaction at least one business
day before the date the deposit is due.
Depositing FUTA Tax
Electronic Reporting
When to deposit. Although Form 940 covers a calendar
year, you may have to make deposits of the tax before
You may file Form 940 electronically and receive proof of
filing the return. Generally, deposit FUTA tax quarterly if
filing acknowledgement. Electronic payment options may
your FUTA tax exceeds $100. Determine your FUTA tax
also be available. For information on filing Form 940
for each of the first three quarters by multiplying by .008
electronically, visit the IRS website at
that part of the first $7,000 of each employee’s annual
wages you paid during the quarter. If any part of the
Not Liable for FUTA Tax?
amounts paid is exempt from state unemployment tax,
If you receive Form 940 and are not liable for FUTA tax
you may be required to deposit an amount greater than
for 2003, write “Not Liable” across the front of the form,
that determined using the .008 rate. For example, in
sign the form, and return it to the IRS.
certain states, wages paid to corporate officers, certain
payments of sick pay by unions, and certain fringe
Penalties and Interest
benefits are exempt from state unemployment tax.
Avoid penalties and interest by making tax deposits when
If your FUTA tax for any of the first three quarters of
due, filing a correct return, and paying all taxes when
2003 (plus any undeposited amount of $100 or less from
due. There are penalties for late deposits, insufficient
any earlier quarter) is over $100, deposit it by the last day
deposits, failure to deposit using EFTPS (when required),
of the first month after the end of the quarter. If it is $100
and late filing unless you can show reasonable cause. If
or less, carry it to the next quarter; a deposit is not
you file late, attach an explanation to the return. There
required. If your FUTA tax for the fourth quarter (plus any
are also penalties for willful failure to pay tax, make
undeposited amount from any earlier quarter) is over
returns, and for filing false or fraudulent returns.
$100, deposit the entire amount by February 2, 2004. If it
is $100 or less, you can either make a deposit or pay it
How To Get Forms and Publications
with your Form 940 by February 2. (If you deposit it by
You can get most IRS forms and publications by
February 2, you may file Form 940 by February 10,
accessing the IRS website at or by calling
the IRS at 1-800-TAX-FORM (1-800-829-3676). See the
The deposit due dates are shown in the following
Instructions for Forms W-2 and W-3 for details and
other options.
If undeposited FUTA tax is over $100 on —
Deposit it
by —
Specific Instructions
March 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . April 30
June 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 31
Employer’s name, address, calendar year, and
September 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . October 31
employer identification number (EIN). If you are not
December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . January 31
using a preaddressed Form 940, type or print your name,
trade name, address, calendar tax year, and EIN on the
If any deposit due date falls on a Saturday,
form. Enter your name, address, calendar tax year, and
Sunday, or legal holiday, you may deposit on the
EIN here, even if you must complete Form 940-V,
next business day.
Payment Voucher.


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