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$ 9,000 Total FUTA wages for Employees A and B in 1

quarter

Follow these steps:

•

x .062 Tax rate

Use a paper return to amend a Form 940 filed under a

$558 Your liability for the first quarter for Employees A and B

magnetic tape or an electronic filing program.

•

Check the amended return box in the top right corner of Form

$4,000 Total FUTA wages subject to state unemployment tax

940, page 1, box a. (For pre-2006 Forms 940 and 940-EZ,

x .008 Tax rate (based on maximum credit of 5.4%)

check the “Amended Return” box above Part I.)

•

$32 Your liability for the first quarter for Employee C

Fill in all the amounts that should have been on the original

form.

•

$558 Your liability for the first quarter for Employees A and B

Sign the form.

•

+ 32 Your liability for the first quarter for Employee C

Attach an explanation of why you are amending your return.

$590 Your liability for the first quarter for Employees A, B, and C

For example, tell us if you are filing to claim credit for tax paid to

your state unemployment fund after the due date of Form 940.

•

In this example, you must deposit $590 by April 30 because your liability for

File the amended return using the Without a payment

the 1

quarter is greater than $500.

address under Where Do You File? on page 2.

Completing Your Form 940

How Must You Deposit Your FUTA Tax?

You may deposit your FUTA tax electronically by using EFTPS

Follow these guidelines to correctly fill out the

or by depositing your tax with an authorized financial institution

form.

(for example, a commercial bank that is qualified to accept

federal tax deposits). The financial institution will send IRS a

To help us accurately scan and process your form, please

record of your payment to credit to your business account.

follow these guidelines:

•

Make sure your business name and EIN are on every page of

You may deposit your FUTA tax using EFTPS

the form and any attachments.

To expedite your deposit and confirm that IRS has received

•

If you type or use a computer to fill out your form, use a

your payment, you may choose to deposit your tax using

12-point Courier font, if possible.

EFTPS. To enroll, call 1-800-555-4477 or visit the EFTPS

•

Make sure you enter dollars to the left of the preprinted

website at

decimal point and cents to the right.

•

If your business is new, IRS will automatically pre-enroll you

Do not use dollar signs or decimal points. Commas are

in EFTPS when you apply for an employer identification number

optional.

•

(EIN). If you choose to deposit your tax using EFTPS, follow the

You may choose to round your amounts to the nearest dollar,

instructions on your EIN package to activate your enrollment.

instead of reporting cents on this form. If you do choose to

round, you must round all entries. To round, follow these steps:

You may be required to use EFTPS. In some cases, you

If the amount is $.49 or less, drop the cents and add nothing to

may be required to deposit your tax using EFTPS. For

the dollar figure. If the amount is between $.50 and $.99,

instance, you must use EFTPS in 2007 if:

•

increase the dollar figure by $1.00 and drop the cents. (For

the total payments of your employment tax, excise tax, and

example, $1.49 becomes $1.00 and $2.50 becomes $3.00.) If

corporate income tax were more than $200,000 for 2005; or

•

you were required to use EFTPS in 2006.

you use two or more amounts to figure an entry on the form,

use cents to figure the answer and round the answer only.

•

To make your EFTPS payments on time, you must

If you have a line with the value of zero, leave it blank.

initiate the transaction at least 1 business day before the

date the deposit is due.

CAUTION

Employer Identification Number (EIN),

If you do not use EFTPS, use Form 8109, Federal Tax

Name, Trade Name, and Address

Deposit (FTD) Coupon, when you deposit your tax. Do not mail

your payments directly to IRS. If you are required to use

EFTPS and you use Form 8109 instead, you may be subject to

Review your business information at the top of

a 10% penalty.

the form

If you are a new employer and would like to receive an FTD

If you pay a tax preparer to fill out Form 940, make sure the

coupon booklet, call 1-800-829-4933. Please allow 5 to 6 weeks

preparer shows your business name and EIN exactly as they

for delivery.

appear on the preprinted form we sent you or as assigned by

the IRS.

How Can You Avoid Penalties and

If you are using a copy of Form 940 that has your business

Interest?

name and address preprinted at the top of the form, check to

make sure that the information is correct. Carefully review your

Penalties and interest are assessed at a rate set by law on

EIN to make sure that it exactly matches the EIN assigned to

taxes paid late, returns filed late or incorrectly, insufficient

your business by the IRS. If any information is incorrect, cross it

payments made, and failure to pay using EFTPS (when

out and type or print the correct information. See Tell us if you

required).

change your name or address below.

You can avoid paying penalties and interest if you:

If you are not using a preprinted Form 940, type or print your

•

deposit or pay your tax when it is due, using EFTPS if

EIN, name, and address in the spaces provided. You must

required; and

enter your name and EIN here and on page 2. Enter the

•

file your completed Form 940 accurately and on time.

business (legal) name that you used when you applied for your

EIN on Form SS-4, Application for Employer Identification

If you receive a notice about penalty and interest after you

Number. For example, if you are a sole proprietor, enter

file this return, send us an explanation and we will determine if

“Ronald Smith” on the Name line and “Ron’s Cycles” on the

you meet reasonable-cause criteria. Do not attach an

Trade Name line. Leave the Trade Name line blank if it is the

explanation when you file your Form 940.

same as your Name.

How Can You Amend a Return?

Employer identification number (EIN). The IRS monitors tax

filings and payments by using a numerical system to identify

You use the 2006 Form 940 to amend a return that you

taxpayers and to make sure that businesses comply with

previously filed for 2006. If you are amending a return for a

federal tax laws. A unique 9-digit EIN is assigned to all

previous year, use the previous year’s Form 940 (or Form

corporations, partnerships, and some sole proprietors.

940-EZ).

Businesses that need an EIN must apply for a number and use

-4-

Instructions For Form 940 - Employer'S Annual Federal Unemployment (Futa) Tax Return - 2006 Page 4

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