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line 8

Example for using the worksheet:

line 9

+line 10

You had 3 employees, 2 of these employees were corporate officers whose

line 12

wages were not subject to state unemployment tax in your state. The other

employee’s wages were subject state unemployment tax. You paid some

state unemployment tax on time, some late, and some remains unpaid.

If line 9 is greater than zero, lines 10 and 11 must be

zero because they would not apply.

Here are the records:

CAUTION

Taxable FUTA wages (line 7 from Form 940) . . . . . . . . . .

$21,000.00

13. FUTA tax deposited for the year

Taxable state unemployment wages . . . . . . . . . . . . . . . .

$ 7,000.00

Experience rate for 2006 . . . . . . . . . . . . . . . . . . . . . . .

.041(4.1%)

Enter the amount of total FUTA tax that you deposited for the

State unemployment tax paid on time . . . . . . . . . . . . . . .

$100.00

year, including any overpayment that you applied from a prior

State unemployment tax paid late . . . . . . . . . . . . . . . . . .

$78.00

year.

State unemployment tax not paid . . . . . . . . . . . . . . . . . .

$109.00

14. Balance due

1. Maximum allowable credit

If line 13 is less than line 12, enter the difference on line 14.

$21,000.00 (line 7 from Form 940)

line 12

x .054 (maximum credit rate)

– line 13

$1,134.00

line 14

If line 14 is:

2. Credit for timely state unemployment tax payments

$100.00

•

More than $500, you must deposit your tax. See When Must

3. Additional credit

$91.00

You Deposit Your FUTA Tax? on page 3.

•

$500 or less, you can deposit your tax, pay your tax with a

.054 (maximum credit rate)

$7,000

major credit card, or pay your tax by check or money order with

– .041 (your experience rate)

x .013

your return.

.013 (your computation rate)

$91.00

•

Less than $1, you do not have to pay it.

4. Subtotal (line 2 + line 3)

$191.00

If you do not deposit as required and pay your tax with

$100

Form 940, you may be subject to a penalty.

+ 91

CAUTION

$191

How to deposit or pay the balance due. You may deposit

5. Credit for paying state unemployment taxes late

using EFTPS or an FTD coupon, or pay using a check, money

5a.

Remaining allowable credit:

5a.

$943.00

order, or major credit card.

•

If you pay using a check or money order, make it payable to

$1,134.00

“United States Treasury.” Be sure to write your EIN, “Form

– 191.00

940,” and “2006” on your check or money order. Complete

$943.00

Form 940-V, Payment Voucher, and enclose it with your return,

5b.

State unemployment tax paid late:

5b.

$78.00

using the With a payment address on page 2 under Where Do

You File?

5c.

Which is smaller? Line 5a or line 5b?

5c.

$78.00

•

You may deposit the amount shown on line 14 using EFTPS

5d.

Allowable credit (for paying late)

5d.

$70.20

or an FTD coupon. If the balance due is more than $500, you

must deposit it.

$78.00

•

Call Link2Gov Corporation (1-888-729-1040) or Official

x .90

Payments Corporation (1-800-272-9829) to make your payment

$70.20

by credit card. However, do not use a credit card to pay taxes

6. Your FUTA credit (line 4 + line 5d)

$261.20

that are required to be deposited. (See When Must You Deposit

Your FUTA Tax? on page 2.) For more information on paying

$191.00

your taxes by credit card, see Pub. 15 (Circular E) or visit the

+ 70.20

IRS website at and type “e-pay” in the search box.

$261.20

If you deposit using EFTPS or an FTD coupon, or pay using

7. Your adjustment (line 1 - line 6)

$872.80

a credit card, file your return using the Without a payment

$1,134.00

address under Where Do You File? on page 2. Do not complete

– 261.20

or file Form 940-V, Payment Voucher.

$872.80 You would enter this amount on line 10 of Form

15. Overpayment

940.

If line 13 is more than line 12, enter the difference on

line 15.

11. If credit reduction applies . . .

The U.S. Department of Labor has announced that there are no

line 13

– line 12

credit reduction states for tax year 2006.

line 15

Note. Line 11 was shaded out for 2006 because there are no

credit reduction states for 2006.

If you deposited more than the FUTA tax due for the year,

you may choose to have us either:

•

Apply the refund to your next return, or

Part 4: Determine Your FUTA Tax

•

Send you a refund.

for 2006

Also, check the appropriate box in line 15 to tell us which

option you select. If you do not check either box, we will

If any line in Part 4 does not apply, leave it blank.

automatically refund your overpayment. Also, we may apply

your overpayment to any past due tax account you have.

12. Total FUTA tax after adjustments

If line 15 is less than $1, we will send you a refund or apply it

Add the amounts shown on lines 8, 9, and 10, and enter the

to your next return only if you ask for it in writing.

result on line 12.

-9-

Instructions For Form 940 - Employer'S Annual Federal Unemployment (Futa) Tax Return - 2006 Page 9

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