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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

you.

deposit requirement below), use Form 8109, Federal

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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

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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

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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.

CAUTION

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

2004.)

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

chart:

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

TIP

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

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