Instructions For Form 940 - 2016


Department of the Treasury
Internal Revenue Service
Instructions for Form 940
Employer's Annual Federal Unemployment (FUTA) Tax Return
Section references are to the Internal Revenue Code unless
act as an agent for an employer, the agent files Form 2678 with
otherwise noted.
the IRS unless you’re a state or local government agency acting
as an agent under the special procedures provided in Rev. Proc.
Future Developments
2013-39, 2013-52 I.R.B. 830, available at
For the latest information about developments related to Form
Disregarded entities and qualified subchapter S subsidia­
940 and its instructions, such as legislation enacted after they
ries (QSubs). Business entities that are disregarded as
were published, go to
separate from their owner, including qualified subchapter S
subsidiaries, are required to withhold and pay employment taxes
What's New
and file employment tax returns using the name and EIN of the
disregarded entity. For more information, see Disregarded
entities, later.
Credit reduction state. A state that hasn't repaid money it
borrowed from the federal government to pay unemployment
State unemployment information. When you registered as an
benefits is a “credit reduction state.” The Department of Labor
employer with your state, the state assigned you a state
determines these states. If an employer pays wages that are
reporting number. If you don't have a state unemployment
subject to the unemployment tax laws of a credit reduction state,
account and state experience tax rate, or if you have questions
that employer must pay additional federal unemployment tax
about your state account, you must contact your state
when filing its Form 940.
unemployment agency. For a list of state unemployment
For 2016, there are credit reduction states. If you paid any
agencies, visit the U.S. Department of Labor's website at
wages that are subject to the unemployment compensation laws
of a credit reduction state, your credit against federal
You can file and pay electronically. Using electronic options
unemployment tax will be reduced based on the credit reduction
can make filing a return and paying your federal tax easier. You
rate for that credit reduction state. Use Schedule A (Form 940) to
can use IRS e-file to file a return and EFTPS to make deposits or
figure the credit reduction. For more information, see the
pay in full whether you rely on a tax professional or prepare your
Schedule A (Form 940) instructions or visit
own taxes.
For e-file, visit the IRS website at
for additional information.
If you change your business name, business address, or
For EFTPS, visit , or call EFTPS Customer
responsible party. Notify the IRS immediately if you change
Service at 1-800-555-4477, 1-800-733-4829 (TDD), or
your business name, business address, or responsible party.
1-800-244-4829 (Spanish).
Write to the IRS office where you file your returns (using the
Electronic funds withdrawal (EFW). If you file Form 940
Without a payment address under Where Do You File, later) to
electronically, you can e-file and e-pay (EFW) the balance due in
notify the IRS of any business name change. See Pub. 1635 to
a single step using tax preparation software or through a tax
see if you need to apply for a new EIN.
professional. However, don't use EFW to make federal tax
Complete and mail Form 8822-B to notify the IRS of a
deposits. For more information on paying your taxes using EFW,
business address or responsible party change. Don’t mail Form
visit the IRS website at payments. A fee may be
8822-B with your Form 940. For a definition of “responsible
charged to file electronically.
party” see the Form 8822-B instructions.
You can pay your balance due by credit or debit card. You
Federal tax deposits must be made by electronic funds
may pay your FUTA tax shown on line 14 using a credit or debit
transfer (EFT). You must use EFT to make all federal tax
card. However, don't use a credit or debit card to pay taxes that
deposits. Generally, an EFT is made using the Electronic
are required to be deposited (see When Must You Deposit Your
Federal Tax Payment System (EFTPS). If you don't want to use
FUTA Tax, later). For more information on paying your taxes with
EFTPS, you can arrange for your tax professional, financial
a credit or debit card, visit the IRS website at
institution, payroll service, or other trusted third party to make
electronic deposits on your behalf. Also, you may arrange for
your financial institution to initiate a same-day wire payment on
Online payment agreement. You may be eligible to apply for
your behalf. EFTPS is a free service provided by the Department
an installment agreement online if you have a balance due when
of Treasury. Services provided by your tax professional, financial
you file your return. For more information, see What if you can't
institution, payroll service, or other third party may have a fee.
pay in full, later.
For more information on making federal tax deposits, see
Outsourcing payroll duties. You’re responsible to ensure that
section 11 of Pub. 15. To get more information about EFTPS or
tax returns are filed and deposits and payments are made, even
to enroll in EFTPS, visit , or call 1-800-555-4477,
if you contract with a third party to perform these acts. You
1-800-733-4829 (TDD), or 1-800-244-4829 (Spanish). Additional
remain responsible if the third party fails to perform any required
information about EFTPS is also available in Pub. 966.
action. If you choose to outsource any of your payroll and related
tax duties (that is, withholding, reporting, and paying over social
Aggregate Form 940 filers. Agents must complete
security, Medicare, FUTA, and income taxes) to a third-party
Schedule R (Form 940), Allocation Schedule for Aggregate
payer, such as a payroll service provider or reporting agent, visit
Form 940 Filers, when filing an aggregate Form 940. Aggregate and enter “outsourcing payroll duties” in the search box
Forms 940 are filed by agents of home care service recipients
for helpful information on this topic.
approved by the IRS under section 3504. To request approval to
Oct 31, 2016
Cat. No. 13660I


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