Instructions For Form 940 - Employer'S Annual Federal Unemployment (Futa) Tax Return - 2006 Page 5

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it throughout the life of the business on all tax returns,
Specific Instructions
payments, and reports.
Your business should have only one EIN. If you have more
than one and are unsure which one to use, call 1-800-829-4933
Part 1: Tell Us About Your Return
to verify your correct EIN.
If any line in Part 1 does not apply, leave it blank.
If you do not have an EIN, apply for one by:
1. If you were required to pay your state
Visiting the IRS website at and filling
out Form SS-4,
unemployment tax in
Calling 1-800-829-4933 and applying by telephone, or
1a. One state only . . .
Writing to the address on Form SS-4.
If you were required to pay state unemployment tax in one
state only, enter the two-letter U.S. Postal Service abbreviation
If you do not have an EIN by the time a return is due, write
for the state where you were required to pay your tax on line 1a.
“Applied For” and the date you applied in the space shown for
For a list of state abbreviations, see the Instructions for
the EIN on pages 1 and 2 of your return.
Schedule A (Form 940) or visit the website for the U.S. Postal
Service at
Always be sure the EIN on the form you file exactly
1b. More than one state (you are a multi-state employer) . . .
TIP
matches the EIN that IRS assigned to your business. Do
not use a social security number or individual taxpayer
If you were required to pay state unemployment tax in more
identification number (ITIN) on forms that ask for an EIN. Filing
than one state, check the box in line 1b. Then fill out Part 1 of
a Form 940 with an incorrect EIN or using the EIN of another’s
Schedule A (Form 940), and attach it to your Form 940.
business may result in penalties and delays in processing your
2. If you paid wages in a state that is subject to
return.
credit reduction . . .
Tell us if you change your name or address
The U.S. Department of Labor has announced that there are no
credit reduction states for tax year 2006.
Notify the IRS immediately if you change your business name
or address.
A state that has not repaid money it borrowed from the
federal government to pay unemployment benefits is called a
If your business name changes, write to the IRS office where
credit reduction state. The U.S. Department of Labor
you would send your return if you had no payment. See Where
determines which states are credit reduction states.
Do You File? on page 2. Also see Pub. 1635, Understanding
Your EIN, for general information on EINs.
If you paid wages that are subject to the unemployment tax
If your address changes, complete and mail Form 8822,
laws of a credit reduction state, you may have to pay more
FUTA tax when filing your Form 940.
Change of Address. Do not attach Form 8822 to your Form
940. Mail Form 8822 separately to the address indicated on
Part 2: Determine Your FUTA Tax Before
Form 8822.
Adjustments for 2006
Type of Return
If any line in Part 2 does not apply, leave it blank.
Review the box at the top of the form. If any line applies to you,
3. Total payments to all employees
check the appropriate box to tell us which type of return you are
Report the total payments you made during the calendar year
filing. You may check more than one box.
on line 3. Include payments for the services of all employees,
a. Amended. If this is an amended return that you are filing
even if the payments are not taxable for FUTA. Your method of
to correct a return that you previously filed, check box a.
payment does not determine whether payments are wages.
b. Successor employer. Check box b if you are a
You may have paid wages hourly, daily, weekly, monthly, or
successor employer and:
yearly. You may have paid wages for piecework or as a
percentage of profits. Include:
You are reporting wages paid before you acquired the
business by a predecessor who was required to file a Form
Compensation, such as:
940 because the predecessor was an employer for FUTA tax
— Salaries, wages, commissions, fees, bonuses, vacation
purposes, or
allowances, and amounts you paid to full-time, part-time, or
You are claiming a special credit for state unemployment
temporary employees.
tax paid before you acquired the business by a predecessor
Fringe benefits, such as:
who was not required to file a Form 940 because the
— Sick pay (including third-party sick pay if liability is
predecessor was not an employer for FUTA tax purposes.
transferred to the employer). For details on sick pay, see
A successor employer is an employer who:
Pub. 15-A, Employer’s Supplemental Tax Guide.
Acquires substantially all the property used in a trade or
— The value of goods, lodging, food, clothing, and non-cash
business of another person (predecessor) or used in a
fringe benefits.
separate unit of a trade or business of a predecessor, and
— Section 125 (cafeteria) plan benefits.
Immediately after the acquisition, employs one or more
Retirement/Pension, such as:
people who were employed by the predecessor.
— Employer contributions to a 401(k) plan, payments to an
c. No payments to employees in 2006. If you are not liable
Archer MSA, payments under adoption assistance
for FUTA tax for 2006 because you made no payments to
programs, and contributions to SIMPLE retirement accounts
employees in 2006, check box c. Then go to Part 7, sign the
(including elective salary reduction contributions).
form, and file it with the IRS.
— Amounts deferred under a non-qualified deferred
d. Final: Business closed or stopped paying wages. If
compensation plan.
Other payments, such as:
this is a final return because you went out of business or
stopped paying wages and you will not be liable for filing
— Tips of $20 or more in a month that your employees
Form 940 in the future, check box d. Complete all applicable
reported to you.
lines on the form, sign it in Part 7, and file it with the IRS.
— Payments made by a predecessor employer to the
employees of a business you acquired.
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