The IRS 940 form is an annual report used by employers to report their Federal Unemployment Tax Act (FUTA) liability. This form helps the IRS track unemployment tax contributions and ensures compliance with federal regulations. For employers looking to fulfill their tax obligations, filling out the IRS 940 form is essential; start the process by clicking the button below.
The IRS 940 form plays a crucial role in the annual tax responsibilities of employers across the United States. This form is primarily used to report and pay federal unemployment taxes (FUTA), which fund unemployment benefits for workers who have lost their jobs. Employers must file the 940 form if they paid wages of $1,500 or more to employees in any calendar quarter during the year, or if they had at least one employee for some part of a day in any 20 or more weeks during the year. Understanding the deadlines for filing, which typically falls on January 31st of the following year, is essential for compliance. Additionally, employers must ensure accurate calculations of their FUTA tax liability, which is generally 6% on the first $7,000 of each employee's wages. However, many employers may qualify for a credit that reduces their effective tax rate. By keeping detailed records and being aware of the necessary adjustments, employers can navigate this form with greater ease and avoid potential penalties. Overall, the IRS 940 form is a key component of the broader tax landscape that impacts businesses and their employees alike.
Form 940 for 2025: Employer’s Annual Federal Unemployment (FUTA) Tax Return
850125
Department of the Treasury — Internal Revenue Service
OMB No. 1545-0029
Employer identification number
—
(EIN)
Name (not your trade name)
Trade name (if any)
Address
Number
Street
Suite or room number
City
State
ZIP code
Foreign country name
Foreign province/county
Foreign postal code
Read the separate instructions before you complete this form. Please type or print within the boxes.
Type of Return (Check all that apply.)
a. Amended
b. Successor employer
c. No payments to employees in 2025
d. Final: Business closed or stopped paying wages
Aggregate Return Filers Only
Type of filer (check one): Section 3504 Agent
Certified Professional Employer Organization (CPEO)
Other Third Party
Part 1: Tell us about your return. If any line does NOT apply, leave it blank. See instructions before completing Part 1.
1a
If you had to pay state unemployment tax in one state only, enter the state abbreviation .
1b
If you had to pay state unemployment tax in more than one state, you are a multi-state
employer
2
If you paid wages in a state that is subject to CREDIT REDUCTION
Check here.
Complete Schedule A (Form 940).
Part 2: Determine your FUTA tax before adjustments. If any line does NOT apply, leave it blank.
3
Total payments to all employees
4
Payments exempt from FUTA tax
Check all that apply: 4a
Fringe benefits
4c
4b
Group-term life insurance
4d
5 Total of payments made to each employee in excess of
$7,000 . . . . . . . . . . . . . . . . 5
6 Subtotal (line 4 + line 5 = line 6) . . . . . . . . . .
. . . . . . . . .. .
Retirement/Pension 4e Dependent care
.
. . . . . . . . . .
Other
6
7 Total taxable FUTA wages (line 3 – line 6 = line 7). See instructions . . . . . . . . .
8 FUTA tax before adjustments (line 7 x 0.006 = line 8) . . . . . . . . . . . . .
7
8
Part 3: Determine your adjustments. If any line does NOT apply, leave it blank.
9
If ALL of the taxable FUTA wages you paid were excluded from state unemployment tax,
multiply line 7 by 0.054 (line 7 × 0.054 = line 9). Go to line 12
10
If SOME of the taxable FUTA wages you paid were excluded from state unemployment tax,
OR you paid ANY state unemployment tax late (after the due date for filing Form 940),
complete the worksheet in the instructions. Enter the amount from line 7 of the worksheet . .
11
If credit reduction applies, enter the total from Schedule A (Form 940)
Part 4: Determine your FUTA tax and balance due or overpayment. If any line does NOT apply, leave it blank.
12
Total FUTA tax after adjustments (lines 8 + 9 + 10 + 11 = line 12)
13
FUTA tax deposited for the year, including any overpayment applied from a prior year .
14Balance due. If line 12 is more than line 13, enter the excess on line 14.
• If line 14 is more than $500, you must deposit your tax.
14
• If line 14 is $500 or less, you may pay with this return. See instructions . . . .
. . .
15a
Overpayment. If line 13 is more than line 12, enter the difference
15b
Check one:
Apply to
Send a
next return.
refund.
15c
Routing number
15d Type:
Checking
Savings
15e
Account number
You MUST complete both pages of this form and SIGN it.
For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. www.irs.gov/Form940 Cat. No. 11234O
Form 940 (2025) Created 6/2/25
850212
Employer identification number (EIN)
–
Part 5: Report your FUTA tax liability by quarter only if line 12 is more than $500. If not, go to Part 6.
16Report the amount of your FUTA tax liability for each quarter; do NOT enter the amount you deposited. If you had no liability for
a quarter, leave the line blank.
16a 1st quarter (January 1 – March 31) . . . . . . . . . 16a.
16b
2nd quarter (April 1 – June 30)
16c
3rd quarter (July 1 – September 30)
16d
4th quarter (October 1 – December 31)
17 Total tax liability for the year (lines 16a + 16b + 16c + 16d = line 17)
17
Total must equal line 12.
Part 6: May we speak with your third-party designee?
Do you want to allow an employee, a paid tax preparer, or another person to discuss this return with the IRS? See the instructions for details.
Yes. Designee’s name and phone number
Select a 5-digit personal identification number (PIN) to use when talking to the IRS.
No.
Part 7: Sign here. You MUST complete both pages of this form and SIGN it.
Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete, and that no part of any payment made to a state unemployment fund claimed as a credit was, or is to be, deducted from the payments made to employees. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
Sign your name here
Date
/ /
Print your name here
Print your title here
Best daytime phone
Paid Preparer Use Only
Preparer’s name
Preparer’s signature
Firm’s name (or yours if self-employed)
Check if you are self-employed
PTIN
/
EIN
Phone
Page 2
Form 940 (2025)
Form 940-V, Payment Voucher
Purpose of Form
Complete Form 940-V if you’re paying your balance due on Form 940 by check or money order. We will use the completed voucher to credit your payment more promptly and accurately, and to improve our service to you.
Making Payments With Form 940
To avoid a penalty, make your payment with your 2025 Form 940 only if your FUTA tax for the fourth quarter (plus any undeposited amounts from earlier quarters) is $500 or less. If your total FUTA tax after adjustments (Form 940, line 12) is more than $500, you must make deposits by electronic funds transfer (EFT). An EFT can be made using the Electronic Federal Tax Payment System (EFTPS), IRS Direct Pay, or your IRS business tax account. Don’t use Form 940-V to make federal tax deposits. You can also pay your balance due by EFT instead of sending Form 940-V. If you pay your balance due by EFT, file your return using the Without a payment address under Where Do You File? in the Instructions for Form 940; don’t file Form 940-V. For more information about EFTPS or to enroll in EFTPS, go to www.eftps.gov. For more information about IRS Direct Pay, go to www.irs.gov/DirectPay. For more information about making an EFT through your IRS business tax account, go to www.irs.gov/BusinessAccount. See When Must You Deposit Your FUTA Tax? in the Instructions for Form 940. Also see sections 11 and 14 of Pub. 15 for more information about deposits.
Use Form 940-V if you’re paying your balance ▲! due on Form 940 by check or money order. CAUTION However, if you pay an amount with Form 940
that should’ve been deposited, you may be subject to a penalty. See Deposit Penalties in section 11 of Pub. 15.
Specific Instructions
Box 1—Employer identification number (EIN). If you don’t have an EIN, you may apply for one online by going to www.irs.gov/EIN. You may also apply for an EIN by faxing or mailing Form SS-4 to the IRS. If you haven’t received your EIN by the due date of Form 940, write “Applied For” and the date you applied in this
entry space.
Box 2—Amount paid. Enter the amount paid with Form 940.
Box 3—Name and address. Enter your name and address as shown on Form 940.
•Enclose your check or money order made payable to “United States Treasury.” Be sure to enter your EIN, “Form 940,” and “2025” on your check or money order. Don’t send cash. Don’t staple Form 940-V or your payment to Form 940 (or to each other).
•Detach Form 940-V and send it with your payment and Form 940 to the address provided in the Instructions for Form 940.
Note: You must also complete the entity information above Part 1 on Form 940.
Detach Here and Mail With Your Payment and Form 940.
Form 940-V
Department of the Treasury
Internal Revenue Service
1Enter your employer identification number (EIN).
Payment Voucher
Don’t staple or attach this voucher to your payment.
2Enter the amount of your payment.
Make your check or money order payable to “United States Treasury.”
2025
Dollars
Cents
3Enter your business name (individual name if sole proprietor). Enter your address.
Enter your city, state, and ZIP code; or your city, foreign country name, foreign province/county, and foreign postal code.
Completing the IRS 940 form is an important step for employers who need to report their annual Federal Unemployment Tax Act (FUTA) liability. After filling out the form, you will submit it to the IRS, which will help ensure compliance with federal tax obligations.
The IRS Form 940, also known as the Employer's Annual Federal Unemployment (FUTA) Tax Return, is a form used by employers to report and pay unemployment taxes to the federal government. This form is essential for employers who pay wages to employees and is typically filed annually. The funds collected through this tax help support unemployed workers and are crucial for the unemployment insurance system.
Generally, any employer who pays wages of $1,500 or more in any calendar quarter or who has at least one employee for at least 20 weeks during the year is required to file Form 940. This includes both full-time and part-time employees. However, some exemptions exist, such as for certain types of organizations and specific employment situations. It is important to assess your business's circumstances to determine if you are obligated to file.
Form 940 is due on January 31 of the year following the tax year being reported. If you have deposited all your FUTA tax on time and in full, you may have until February 10 to file the form. It is crucial to meet these deadlines to avoid penalties and interest on any unpaid taxes. Keeping track of your filing dates can help ensure compliance with IRS requirements.
Form 940 can be filed either electronically or by mail. To file electronically, you can use the IRS e-file system or authorized e-file providers. If you choose to file by mail, you will need to send the completed form to the address specified in the form's instructions. Make sure to keep a copy of the submitted form for your records. Additionally, double-check the information you provide to avoid errors that could lead to delays or penalties.
Incorrect Employer Identification Number (EIN): One common mistake is entering the wrong EIN. This number is essential for identifying your business. Double-check it to ensure accuracy.
Failing to Report All Wages: Some people forget to include all taxable wages. It’s important to report every employee’s wages accurately. Missing even one can lead to issues with your tax calculations.
Not Checking the Box for State Unemployment Tax: If your state requires you to pay unemployment tax, make sure to check the appropriate box. Failing to do so can result in penalties.
Missing Signature: Lastly, forgetting to sign the form is a frequent error. A signature is necessary to validate the form. Without it, the IRS may reject your submission.
The IRS 940 form is essential for employers to report their annual Federal Unemployment Tax Act (FUTA) liability. However, several other forms and documents are often used in conjunction with it to ensure compliance with federal and state regulations. Below are five important forms that complement the IRS 940 form.
Understanding these forms is crucial for employers to maintain compliance and avoid potential penalties. Each document serves a specific purpose in the broader context of payroll and tax reporting, ensuring that all obligations are met efficiently.
The IRS Form 941 is similar to the IRS Form 940 in that both are used by employers to report payroll taxes. Form 941 is filed quarterly and details the federal income tax withheld from employee wages, along with Social Security and Medicare taxes. In contrast, Form 940 is an annual report specifically for the Federal Unemployment Tax Act (FUTA) tax. While both forms serve the purpose of tax reporting, their focus and frequency of filing differ significantly.
Another document that shares similarities with Form 940 is the IRS Form 944. This form is designed for small employers who report their payroll taxes annually instead of quarterly. Like Form 940, Form 944 is concerned with federal employment taxes, but it primarily focuses on the withholding of income tax and payroll taxes for Social Security and Medicare. The distinction lies in the frequency of reporting and the specific tax obligations each form addresses.
The IRS Form 945 is also comparable to Form 940. Form 945 is used to report backup withholding on payments made to non-employees, such as independent contractors. While both forms are concerned with federal tax reporting, Form 945 specifically addresses non-employee compensation, whereas Form 940 focuses on unemployment taxes related to employee wages. Both forms require accurate reporting to ensure compliance with federal tax obligations.
IRS Form W-2 is another document that bears resemblance to Form 940, as it is integral to the payroll tax process. Form W-2 is issued annually to employees, summarizing their earnings and the taxes withheld throughout the year. While Form 940 reports on unemployment taxes at a broader employer level, W-2 forms provide detailed information about individual employee earnings and tax withholdings. Both forms play essential roles in the overall payroll tax framework.
Form 1099-MISC also shares similarities with Form 940, particularly in the realm of tax reporting for non-employees. This form is used to report various types of income paid to independent contractors and other non-employees. While Form 940 focuses on unemployment taxes for employees, Form 1099-MISC is concerned with reporting income that does not fall under traditional employment. Both forms highlight the importance of accurate reporting for tax compliance.
Finally, IRS Form 720 is relevant when discussing documents similar to Form 940. Form 720 is used to report and pay federal excise taxes. Although it serves a different purpose, both forms are part of the broader tax compliance framework for businesses. Form 720 is filed quarterly, while Form 940 is filed annually, reflecting the different types of tax obligations businesses face. Each form requires careful attention to ensure compliance with federal tax laws.
When filling out the IRS 940 form, it's important to follow certain guidelines to ensure accuracy and compliance. Here are some things you should and shouldn't do:
The IRS Form 940 is an important document for employers, but there are several misconceptions surrounding it. Here are seven common misunderstandings:
This is not true. Any employer who pays wages subject to federal unemployment tax must file Form 940, regardless of the size of their business.
While both forms are related to payroll taxes, they serve different purposes. Form 941 is for reporting income taxes, Social Security, and Medicare taxes withheld from employee wages, whereas Form 940 focuses on federal unemployment taxes.
This is a misconception. Form 940 is an annual return, meaning it must be filed once a year, not quarterly.
Even if a business has no employees for part of the year, it may still need to file Form 940 if it paid wages during the year.
This is incorrect. If you meet the requirements, filing Form 940 is mandatory to report your federal unemployment tax liability.
All employers who pay wages subject to federal unemployment tax must file this form, regardless of their industry.
Filing the form does not automatically protect you from penalties. It is crucial to file accurately and on time to avoid any fines.
The IRS Form 940 is essential for employers who need to report their annual Federal Unemployment Tax Act (FUTA) taxes. Understanding how to properly fill out and use this form can help ensure compliance and avoid penalties. Here are some key takeaways:
By keeping these points in mind, you can navigate the requirements of the IRS Form 940 more effectively. Proper management of this form not only ensures compliance but also supports the welfare of employees during times of need.