Publication 5258 - Federal Tax Deposits Page 15
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federal tax deposit rules
for form 940 taxes
c hapterTHree
I
n addition to taxes reported on Forms 941 or 944, employers are also responsi-
ble for Federal Unemployment Tax Act (FUTA) taxes which are reported on Form
940. Only the employer pays FUTA tax—it is not deducted from employees’ wages
and is not a trust fund tax.
Who must make deposits?
What it means
An employer with more than $500 in undeposited FUTA tax at the end of any quar-
ter. This includes any FUTA tax that was not deposited in a prior quarter during the
form 940: Employer’s
calendar year. As of January 1, 2011, all deposits must be made electronically.
Annual Federal
Unemployment Tax
how is the amount of deposit determined?
(FUTA) Return–Return
reporting federal
The tax applies only to the first $7,000 paid to each employee each year. Gener-
unemployment tax,
ally, for deposit purposes you will figure FUTA tax liability quarterly by multiply-
due January 31st of the
ing taxable wages by .006 (.6%). This may differ if any wages subject to federal
following year.
unemployment tax are exempt from state unemployment tax or if the state hasn't
repaid loans from the federal government to pay unemployment benefits. Publi-
cation 15 (Circular E), Employer's Tax Guide, and the Instructions for Form 940 pro-
vide more information.
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