Instructions For Form 940 - Employer'S Annual Federal Unemployment (Futa) Tax Return - 2003 Page 5

ADVERTISEMENT

acquirer A to Jones) yields $1,000. Acquirer A reports
as payments of state unemployment contributions, attach
$8,000 (total payments) on line 1 and $6,000 ($5,000
a copy of the letter from your state. Do not include any
paid by prior employer P and $1,000 in excess of the
penalties, interest, or special administrative taxes (such
$7,000 wage base) on line 3. See section 3306(b)(1) and
as surcharges, employment and training taxes, excise
Regulations section 31.3306(b)(1)-1(b).
tax, and assessments, which are generally listed as a
separate item on the state’s quarterly wage report) not
Line 5 — Total taxable wages. This is the total amount
included in the experience rate assigned to you.
subject to FUTA tax. Use this amount in Part II to
compute the gross FUTA tax and the maximum credit.
Line 3a — Totals. Enter the totals of columns (h)
and (i).
Part II. Tax Due or Refund
Line 3b — Total tentative credit. Add line 3a, columns
(h) and (i). As noted above, column (i) includes only
Line 1 — Gross FUTA tax. Multiply the total taxable
payments to your state unemployment fund that you
wages from Part I, line 5, by .062. This is the maximum
made by the due date for filing Form 940. Payments
amount of FUTA tax.
made after the due date are eligible for a reduced credit
Line 2 — Maximum credit. Multiply the total taxable
and will appear on line 6 as described below.
wages from Part I, line 5, by .054. This is the maximum
Line 6 — Credit. This is the credit allowable for your
credit against FUTA tax for state contributions.
payments to state unemployment funds. If you made no
Line 3 — Computation of tentative credit. You must
late state contributions, enter the smaller of the amount
complete all applicable columns to receive any credit.
from Part II, line 2 or line 3b. If you do not have to make
Your state will provide an experience rate to you. If you
payments to the state, enter zero on this line.
have been assigned an experience rate of zero percent
or more, but less than 5.4%, for all or part of the year,
If any state contributions were made after the
!
use columns (a) through (i). If you have not been
Form 940 due date (February 2 or February 10 as
assigned any experience rate, use columns (a), (b), (c),
explained under When To File on page 1), your
CAUTION
and (i) only. If you have been assigned a rate of 5.4% or
credit for late contributions is limited to 90% of the
higher, use columns (a), (b), (c), (d), (e), and (i) only. If
amount that would have been allowable as a credit if
you were assigned an experience rate for only part of the
such contributions were paid on or before the Form 940
year or the rate was changed during the year, complete a
due date.
separate line for each rate period.
Only taxpayers who made late contributions should
If you need additional lines, attach a separate
complete the worksheet below.
statement with a similar format. Also, if you are a
successor employer, see Special credit for successor
employers, on page 3.
Worksheet for Credit Computation if Any State
Contributions Were Paid After the Due Date for Filing
Column (a). Enter the two-letter abbreviation for the
Form 940
state(s) to which you were required to pay contributions
(including the District of Columbia, Puerto Rico, and the
A. Enter the amount from Form 940, Part II,
U.S. Virgin Islands).
line 2 . . . . . . . . . . . . . . . . . . . . . . . . . .
Column (b). Enter the state reporting number
B. Enter the amount from Form 940, Part II,
line 3b, if any . . . . . . . . . . . . . . . . . . . .
assigned to you when you registered as an employer with
each state. Failure to enter the correct number may result
C. Subtract line B from line A. If zero or less,
enter -0- . . . . . . . . . . . . . . . . . . . . . . . .
in unnecessary correspondence.
D. Enter total contributions paid to the
Column (c). Enter the state taxable payroll on which
state(s) after the Form 940 due date . . .
you must pay state unemployment taxes for each state
E. Enter the smaller of line C or D . . . . . . .
shown in column (a). If your experience rate is zero
F. Multiply line E by .90 (90%) . . . . . . . . . .
percent, enter the wages that would have been subject to
G. Add lines B and F . . . . . . . . . . . . . . . . .
state unemployment tax if the zero percent rate had not
H. Enter the smaller of the amount on line G
been granted.
or A here and on Form 940, Part II, line 6
Column (d). Enter the beginning and ending dates of
the experience rate shown in column (e).
Example of late state contributions. You paid
Column (e). Enter your state experience rate —the
$1,500 of state contributions by the Form 940 due date
rate the state assigned to you for paying your state
and $1,000 after that date. Your maximum credit on Form
unemployment tax. This rate may change based on your
940, Part II, line 2 is $2,000, and your tentative credit on
“experience” with the state unemployment fund, for
line 3b is $1,500. The maximum credit less the tentative
example, because of unemployment compensation paid
credit is $500. If you had paid the $1,000 state
to your former employees. If you do not know your
contributions on time, you would have been allowed an
experience rate, contact your state unemployment office.
additional credit of only $500, not the full $1,000.
The state experience rate can be stated as a percentage
Therefore, the credit for the late contributions is limited to
or as a decimal (e.g., 2.7% or .027).
90% of $500. You complete the worksheet as follows:
Column (f). Multiply the amount in column (c) by .054.
Column (g). Multiply the amount in column (c) by the
A. Enter the amount from Form 940, Part II,
line 2 . . . . . . . . . . . . . . . . . . . . . . . . . .
rate in column (e).
$2,000
B. Enter the amount from Form 940, Part II,
Column (h). Subtract column (g) from column (f). If
line 3b, if any . . . . . . . . . . . . . . . . . . . .
1,500
zero or less, enter zero. This additional credit is the
C. Subtract line B from line A. If zero or
difference between 5.4% and your state experience rate.
less, enter -0- . . . . . . . . . . . . . . . . . . . .
500
Column (i). Enter the contributions you actually paid
D. Enter total contributions paid to the
to the state unemployment fund by the due date for filing
state(s) after the Form 940 due date . . .
1,000
your Form 940. Do not include amounts you are required
E. Enter the smaller of line C or D . . . . . . .
500
to pay but have not paid by the Form 940 due date
F. Multiply line E by .90 (90%) . . . . . . . . . .
450
(February 2 or February 10 as explained under When To
G. Add lines B and F . . . . . . . . . . . . . . . . .
1,950
File on page 1). If you are filing Form 940 after the due
H. Enter the smaller of the amount on line
date, include only payments made by the return due
G or A here and on Form 940, Part II,
date, and see the instructions and worksheet under Line
line 6 . . . . . . . . . . . . . . . . . . . . . . . . . .
1,950
6 — Credit below. If you are claiming excess credits
-5-

ADVERTISEMENT

00 votes

Related Articles

Related forms

Related Categories

Parent category: Financial
Go
Page of 6