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Formulaire 940 Instructions

Instructions pour le formulaire 940, Déclaration d'impôt fédérale sur le chômage (FUTA) de l'employeur

Rév. 2023

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  • Formulaire 940 - Déclaration annuelle d'impôt fédéral sur le chômage (FUTA) de l'employeur
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Department of the Treasury  
Internal Revenue Service  
2023  
Instructions for Form 940  
Employer's Annual Federal Unemployment (FUTA) Tax Return  
Section references are to the Internal Revenue Code  
unless otherwise noted.  
Certification program for professional employer or-  
ganizations (PEOs). The Stephen Beck, Jr., Achieving a  
Better Life Experience Act of 2014 required the IRS to  
establish a voluntary certification program for PEOs.  
PEOs handle various payroll administration and tax  
reporting responsibilities for their business clients and are  
typically paid a fee based on payroll costs. To become and  
remain certified under the certification program, certified  
professional employer organizations (CPEOs) must meet  
various requirements described in sections 3511 and  
7705 and related published guidance. Certification as a  
CPEO may affect the employment tax liabilities of both the  
CPEO and its customers. A CPEO is generally treated for  
employment tax purposes as the employer of any  
Future Developments  
For the latest information about developments related to  
Form 940 and its instructions, such as legislation enacted  
after they were published, go to IRS.gov/Form940.  
What's New  
Credit reduction state. A state that hasn't repaid money  
it borrowed from the federal government to pay  
unemployment benefits is called a credit reduction state.  
The U.S. Department of Labor determines these states. If  
an employer pays wages that are subject to the  
unemployment tax laws of a credit reduction state, that  
employer must pay additional federal unemployment tax  
when filing its Form 940.  
individual who performs services for a customer of the  
CPEO and is covered by a contract described in section  
7705(e)(2) between the CPEO and the customer (CPEO  
contract), but only for wages and other compensation paid  
to the individual by the CPEO. To become a CPEO, the  
organization must apply through the IRS Online  
For 2023, there are credit reduction states. If you paid  
any wages that are subject to the unemployment  
compensation laws of a credit reduction state, your credit  
against federal unemployment tax will be reduced based  
on the credit reduction rate for that credit reduction state.  
Use Schedule A (Form 940) to figure the credit reduction.  
For more information, see the Schedule A (Form 940)  
instructions or go to IRS.gov.  
New Form 940 (sp) available in Spanish for tax year  
2023. All employers, including employers in Puerto Rico  
and the U.S. Virgin Islands, have the option to file new  
Form 940 (sp) for tax year 2023. Form 940-PR is no longer  
available to file for tax years beginning after December 31,  
2022.  
Registration System. For more information or to apply to  
become a CPEO, go to IRS.gov/CPEO.  
For wages paid to a work site employee, a CPEO is  
eligible for the credit for state unemployment tax paid to a  
state unemployment fund, whether the CPEO or a  
customer of the CPEO made the contribution. In addition,  
a CPEO is allowed the additional credit if the CPEO is  
permitted, under state law, to collect and remit  
contributions to the state unemployment fund with respect  
to a work site employee. For more information on the  
CPEOs must generally file Form 940 and Schedule R  
(Form 940), Allocation Schedule for Aggregate Form 940  
Filers, electronically. For more information about a CPEO’s  
requirement to file electronically, see Rev. Proc. 2023-18,  
2023-13 I.R.B 605, available at IRS.gov/irb/  
Electronically filing an amended Form 940. Beginning  
sometime in 2024, the IRS expects to make filing an  
amended Form 940 available as part of Modernized e-File  
(MeF). Monitor IRS.gov for more information on  
availability.  
Outsourcing payroll duties. Generally, as an employer,  
you're responsible to ensure that tax returns are filed and  
deposits and payments are made, even if you contract  
with a third party to perform these acts. You remain  
responsible if the third party fails to perform any required  
action. Before you choose to outsource any of your payroll  
and related tax duties (that is, withholding, reporting, and  
paying over social security, Medicare, FUTA, and income  
taxes) to a third-party payer, such as a payroll service  
provider or reporting agent, go to IRS.gov/  
Reminders  
Moving expense and bicycle commuting reimburse-  
ments are subject to FUTA tax. The Tax Cuts and Jobs  
Act (P.L. 115-97) suspends the exclusion for qualified  
moving expense reimbursements from your employee's  
income under section 132 and the deduction from the  
employee's income under section 217, as well as the  
exclusion for qualified bicycle commuting reimbursements  
from your employee's income under section 132,  
beginning after 2017 and before 2026. Therefore, moving  
expense and bicycle commuting reimbursements aren't  
exempt from FUTA tax during this period. Don't include  
moving expense or bicycle commuting reimbursements on  
Form 940, line 4. For more information about fringe  
benefits, see Pub. 15-B.  
OutsourcingPayrollDuties for helpful information on this  
topic. If a CPEO pays wages and other compensation to  
an individual performing services for you, and the services  
are covered by a CPEO contract, then the CPEO is  
generally treated for employment tax purposes as the  
employer, but only for wages and other compensation  
Nov 28, 2023  
Cat. No. 13660I  
paid to the individual by the CPEO. However, with respect  
to certain employees covered by a CPEO contract, you  
may also be treated as an employer of the employees  
and, consequently, may also be liable for federal  
employment taxes imposed on wages and other  
compensation paid by the CPEO to such employees. For  
more information on the different types of third-party payer  
arrangements, see section 16 of Pub. 15.  
800-555-4477 number above or 800-733-4829. Additional  
information about EFTPS is also available in Pub. 966.  
Electronic filing and payment. Businesses can enjoy  
the benefits of filing and paying their federal taxes  
electronically. Whether you rely on a tax professional or  
handle your own taxes, the IRS offers you convenient and  
secure programs to make filing and paying easier. Spend  
less time worrying about taxes and more time running your  
business. Use e-file and EFTPS to your benefit.  
Aggregate Form 940 filers. Approved section 3504  
agents and CPEOs must complete Schedule R (Form  
940) when filing an aggregate Form 940. Aggregate  
Forms 940 are filed by agents of home care service  
recipients approved by the IRS under section 3504. To  
request approval to act as an agent for an employer, the  
agent files Form 2678 with the IRS unless you’re a state or  
local government agency acting as an agent under the  
special procedures provided in Rev. Proc. 2013-39,  
2013-52 I.R.B. 830, available at IRS.gov/irb/  
For e-file, go to IRS.gov/EmploymentEfile for additional  
information. A fee may be charged to file electronically.  
For EFTPS, go to EFTPS.gov or call one of the numbers  
Electronic funds withdrawal (EFW). If you file Form  
940 electronically, you can e-file and use EFW to pay the  
balance due in a single step using tax preparation  
software or through a tax professional. However, don't use  
EFW to make federal tax deposits. For more information  
on paying your taxes using EFW, go to IRS.gov/EFW.  
Credit or debit card payments. You may pay your FUTA  
tax shown on line 14 using a credit or debit card. Your  
payment will be processed by a payment processor who  
will charge a processing fee. Don't use a credit or debit  
card to pay taxes that are required to be deposited (see  
information on paying your taxes with a credit or debit  
card, go to IRS.gov/PayByCard.  
Aggregate Forms 940 are also filed by CPEOs  
approved by the IRS under section 7705. CPEOs file Form  
8973, Certified Professional Employer Organization/  
Customer Reporting Agreement, to notify the IRS that they  
started or ended a service contract with a customer.  
CPEOs must generally file Form 940 and Schedule R  
(Form 940) electronically. For more information about a  
CPEO's requirement to file electronically, see Rev. Proc.  
If you change your business name, business ad-  
dress, or responsible party. Notify the IRS immediately  
if you change your business name, business address, or  
responsible party.  
Online payment agreement. You may be eligible to  
apply for an installment agreement online if you can't pay  
the full amount of tax you owe when you file your return.  
For more information, see What if you can't pay in full,  
later.  
Disregarded entities and qualified subchapter S sub-  
sidiaries (QSubs). Business entities that are  
disregarded as separate from their owner, including  
QSubs, are required to withhold and pay employment  
taxes and file employment tax returns using the name and  
EIN of the disregarded entity. For more information, see  
Write to the IRS office where you file your returns (using  
the Without a payment address under Where Do You File,  
later) to notify the IRS of any business name change. See  
Pub. 1635 to see if you need to apply for a new employer  
identification number (EIN).  
Complete and mail Form 8822-B to notify the IRS of a  
business address or responsible party change. Don’t mail  
Form 8822-B with your Form 940. For a definition of  
“responsible party,” see the Instructions for Form SS-4.  
State unemployment information. When you  
registered as an employer with your state, the state  
assigned you a state reporting number. If you don't have a  
state unemployment account and state experience tax  
rate, or if you have questions about your state account,  
you must contact your state unemployment agency. For a  
list of state unemployment agencies, go to the U.S.  
Department of Labor's website at oui.doleta.gov/  
Photographs of missing children. The IRS is a proud  
Children® (NCMEC). Photographs of missing children  
selected by the Center may appear in instructions on  
pages that would otherwise be blank. You can help bring  
these children home by looking at the photographs and  
calling 1-800-THE-LOST (1-800-843-5678) if you  
recognize a child.  
Federal tax deposits must be made by electronic  
funds transfer (EFT). You must use EFT to make all  
federal tax deposits. Generally, an EFT is made using the  
Electronic Federal Tax Payment System (EFTPS). If you  
don't want to use EFTPS, you can arrange for your tax  
professional, financial 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 your behalf.  
EFTPS is a free service provided by the Department of the  
Treasury. Services provided by your tax professional,  
financial institution, payroll service, or other third party  
may have a fee.  
For more information on making federal tax deposits,  
see section 11 of Pub. 15. To get more information about  
EFTPS or to enroll in EFTPS, go to EFTPS.gov, or call  
800-555-4477 or 800-244-4829 (Spanish). To contact  
EFTPS using Telecommunications Relay Services (TRS)  
for people who are deaf, hard of hearing, or have a speech  
disability, dial 711 and then provide the TRS assistant the  
How Can You Get More Help?  
If you want more information about this form, see Pub. 15,  
go to IRS.gov, or call the Business and Specialty Tax Line  
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Instructions for Form 940 (2023)  
 
toll free at 800-829-4933 or 800-829-4059 (TDD/TTY for  
persons who are deaf, hard of hearing, or have a speech  
disability), Monday–Friday from 7:00 a.m. to 7:00 p.m.  
local time (Alaska and Hawaii follow Pacific time;  
employers in Puerto Rico receive service from 8:00 a.m.  
to 8:00 p.m. local time).  
you paid cash wages of $1,000 or more in any calendar  
quarter in 2022 or 2023.  
A household employee performs household work in a:  
Private home,  
Local college club, or  
Local chapter of a college fraternity or sorority.  
For a list of related employment tax topics, go to  
IRS.gov/EmploymentTaxes. You can order forms,  
instructions, and publications at IRS.gov/OrderForms.  
Generally, employers of household employees must file  
Schedule H (Form 1040) instead of Form 940.  
However, if you have other employees in addition to  
household employees, you can choose to include the  
FUTA taxes for your household employees on Form 940  
instead of filing Schedule H (Form 1040). If you choose to  
include household employees on your Form 940, you  
must also file Form 941, Employer's QUARTERLY Federal  
Tax Return; Form 943, Employer's Annual Federal Tax  
Return for Agricultural Employees; or Form 944,  
Employer's ANNUAL Federal Tax Return, to report social  
security, Medicare, and any withheld federal income taxes  
for your household employees. See Pub. 926 for more  
information.  
General Instructions  
What's the Purpose of Form 940?  
These instructions give you some background information  
about Form 940. They tell you who must file the form, how  
to fill it out line by line, and when and where to file it.  
Use Form 940 to report your annual Federal  
Unemployment Tax Act (FUTA) tax. Together with state  
unemployment tax systems, the FUTA tax provides funds  
for paying unemployment compensation to workers who  
have lost their jobs. Most employers pay both a federal  
and a state unemployment tax. Only employers pay FUTA  
tax. Don't collect or deduct FUTA tax from your  
employees' wages.  
For Agricultural Employers . . .  
File Form 940 if you answer “Yes” to either of these  
questions.  
Did you pay cash wages of $20,000 or more to  
farmworkers during any calendar quarter in 2022 or 2023?  
The FUTA tax applies to the first $7,000 you pay to  
each employee during a calendar year after subtracting  
any payments exempt from FUTA tax.  
Did you employ 10 or more farmworkers during some  
part of the day (whether or not at the same time) during  
any 20 or more different weeks in 2022 or 20 or more  
different weeks in 2023?  
Who Must File Form 940?  
Except as noted below, if you answer “Yes” to either one of  
Count wages you paid to aliens who were admitted to  
the United States on a temporary basis to perform  
farmwork (workers with H-2A visas). However, wages paid  
to “H-2A visa workers” aren't subject to FUTA tax. See  
Pub. 51 for more information.  
these questions, you must file Form 940.  
Did you pay wages of $1,500 or more to employees in  
any calendar quarter during 2022 or 2023?  
Did you have one or more employees for at least some  
part of a day in any 20 or more different weeks in 2022 or  
20 or more different weeks in 2023? Count all full-time,  
part-time, and temporary employees. However, if your  
business is a partnership, don't count its partners.  
For Indian Tribal Governments . . .  
Services rendered by employees of a federally recognized  
Indian tribal government employer (including any  
subdivision, subsidiary, or business enterprise wholly  
owned by the tribe) are exempt from FUTA tax and no  
Form 940 is required. However, the tribe must have  
participated in the state unemployment system for the full  
year and be in compliance with applicable state  
unemployment law. For more information, see section  
3309(d).  
If your business was sold or transferred during the year,  
each employer who answered “Yes” to at least one  
question above must file Form 940. However, don't include  
any wages paid by the predecessor employer on your  
Form 940 unless you’re a successor employer. For details,  
If you’re not liable for FUTA tax for 2023 because you  
made no payments to employees in 2023, check box c in  
the top right corner of the form. Then, go to Part 7, sign  
the form, and file it with the IRS.  
For Tax-Exempt Organizations . . .  
Religious, educational, scientific, charitable, and other  
organizations described in section 501(c)(3) and exempt  
from tax under section 501(a) generally aren't subject to  
FUTA tax. However, a section 501(c)(3) organization is  
subject to FUTA tax when paying wages to employees on  
behalf of a non-section 501(c)(3) organization (for  
example, a section 501(c)(3) organization paying wages to  
employees of a related non-section 501(c)(3)  
If you won’t be liable for filing Form 940 in the future  
because your business has closed or because you  
stopped paying wages, check box d in the top right corner  
of the form. For more information, see Final: Business  
later.  
organization, a section 501(c)(3) organization that is a  
section 3504 agent paying wages on behalf of a  
For Employers of Household Employees . . .  
If you’re a household employer, you must pay FUTA tax on  
wages that you paid to your household employees only if  
non-section 501(c)(3) organization, a section 501(c)(3)  
organization that is a common paymaster paying wages  
on behalf of a non-section 501(c)(3) organization, etc.).  
Instructions for Form 940 (2023)  
-3-  
   
If any due date for filing falls on a Saturday, Sunday, or  
legal holiday, you may file your return on the next business  
day.  
For State or Local Government Employers . . .  
Services rendered by employees of a state, or a political  
subdivision or instrumentality of the state, are exempt from  
FUTA tax and no Form 940 is required.  
Where Do You File?  
When Must You File Form 940?  
The due date for filing Form 940 for 2023 is January 31,  
2024. However, if you deposited all your FUTA tax when it  
was due, you may file Form 940 by February 12, 2024.  
You’re encouraged to file Form 940 electronically. Go to  
IRS.gov/EmploymentEfile for more information on  
electronic filing. If you file a paper return, where you file  
depends on whether you include a payment with Form  
940. Mail your return to the address listed for your location  
in the table that follows.  
If we receive Form 940 after the due date, we will treat  
Form 940 as filed on time if the envelope containing Form  
940 is properly addressed, contains sufficient postage,  
and is postmarked by the U.S. Postal Service on or before  
the due date, or sent by an IRS-designated private  
delivery service (PDS) on or before the due date.  
However, if you don't follow these guidelines, we will  
generally consider Form 940 filed when it is actually  
received. For more information about PDSs, see Where  
Do You File, later.  
PDSs can't deliver to P.O. boxes. You must use the U.S.  
Postal Service to mail an item to a P.O. box address. Go to  
IRS.gov/PDS for the current list of PDSs. For the IRS  
mailing address to use if you’re using a PDS, go to  
IRS.gov/PDSstreetAddresses. Select the mailing address  
listed on the webpage that is in the same state as the  
address to which you would mail returns filed without a  
payment, as shown in the table that follows.  
Mailing Addresses for Form 940  
If you’re in . . .  
Without a payment . . .  
With a payment . . .  
Connecticut, Delaware, District of Columbia, Georgia, Illinois, Department of the Treasury  
Internal Revenue Service  
P.O. Box 806531  
Indiana, Kentucky, Maine, Maryland, Massachusetts,  
Michigan, New Hampshire, New Jersey, New York, North  
Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina,  
Tennessee, Vermont, Virginia, West Virginia, Wisconsin  
Internal Revenue Service  
Kansas City, MO 64999-0046 Cincinnati, OH 45280-6531  
Alabama, Alaska, Arizona, Arkansas, California, Colorado,  
Florida, Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota,  
Mississippi, Missouri, Montana, Nebraska, Nevada, New  
Mexico, North Dakota, Oklahoma, Oregon, South Dakota,  
Texas, Utah, Washington, Wyoming  
Department of the Treasury  
Internal Revenue Service  
Ogden, UT 84201-0046  
Internal Revenue Service  
P.O. Box 932000  
Louisville, KY 40293-2000  
Puerto Rico, U.S. Virgin Islands  
Internal Revenue Service  
P.O. Box 409101  
Ogden, UT 84409  
Internal Revenue Service  
P.O. Box 932000  
Louisville, KY 40293-2000  
If the location of your legal residence, principal place of  
business, office, or agency is not listed  
Internal Revenue Service  
P.O. Box 409101  
Ogden, UT 84409  
Internal Revenue Service  
P.O. Box 932000  
Louisville, KY 40293-2000  
EXCEPTION for tax-exempt organizations; federal, state, and Department of the Treasury  
Internal Revenue Service  
P.O. Box 932000  
Louisville, KY 40293-2000  
local governments; and Indian tribal governments, regardless Internal Revenue Service  
of your location  
Ogden, UT 84201-0046  
Your filing address may have changed from that  
is true regardless of whether state law defers the payment  
of taxes due until after this date. If you didn't pay all state  
unemployment tax by the due date of Form 940, see the  
line 10 instructions. For wages paid to a work site  
employee, a CPEO is eligible for the credit whether the  
CPEO or a customer of the CPEO made the contribution  
with respect to a work site employee.  
used to file your employment tax return in prior  
years.  
!
CAUTION  
Credit for State Unemployment Tax  
Paid to a State Unemployment Fund  
Generally, you get a credit for amounts you pay to a state  
(including the District of Columbia, Puerto Rico, and the  
U.S. Virgin Islands) unemployment fund by January 31,  
2024 (or February 12, 2024, if that is your Form 940 due  
date). Your FUTA tax may be higher if you don't pay the  
state unemployment tax timely by January 31, 2024 (or  
February 12, 2024, if that is your Form 940 due date). This  
State unemployment taxes are sometimes called  
contributions. These contributions are payments that a  
state requires an employer to make to its unemployment  
fund for the payment of unemployment benefits. They  
don't include:  
Any payments deducted or deductible from your  
employees' pay;  
-4-  
Instructions for Form 940 (2023)  
   
Penalties, interest, or special administrative taxes; and  
Voluntary amounts you paid to get a lower assigned  
When To Deposit Your FUTA Tax  
If your undeposited FUTA tax  
state experience rate.  
is more than $500 on . . .*  
Deposit your tax by . . .  
Additional credit. You may receive an additional credit if  
you have a state experience rate lower than 5.4% (0.054).  
This applies even if your rate varies during the year. This  
additional credit is the difference between your actual  
state unemployment tax payments and the amount you  
would have been required to pay at 5.4%. For wages paid  
to a work site employee, the CPEO is allowed the  
March 31  
June 30  
September 30  
December 31  
April 30  
July 31  
October 31  
January 31  
* Also, see the instructions for line 16.  
If any deposit due date falls on a Saturday,  
Sunday, or legal holiday, you may deposit on the  
next business day. See Timeliness of federal tax  
additional credit if the CPEO is allowed, under state law, to  
collect and remit contributions to the state unemployment  
fund with respect to a work site employee.  
TIP  
deposits, later.  
Special credit for successor employers. You may be  
eligible for a credit based on the state unemployment  
taxes paid by a predecessor. You may claim this credit if  
you’re a successor employer who acquired a business in  
2023 from a predecessor who wasn't an employer for  
FUTA purposes and, therefore, wasn't required to file  
Form 940 for 2023. See section 3302(e). You can include  
amounts paid by the predecessor on the  
How Do You Figure Your FUTA Tax  
Liability for Each Quarter?  
You owe FUTA tax on the first $7,000 you pay to each  
employee during the calendar year after subtracting any  
payments exempt from FUTA tax. The FUTA tax is 6.0%  
(0.060) for 2023. Most employers receive a maximum  
credit of up to 5.4% (0.054) against this FUTA tax. Every  
quarter, you must figure how much of the first $7,000 of  
each employee's annual wages you paid during that  
quarter.  
Worksheet—Line 10 as if you paid them. For details on  
successor employers, see Successor employer under  
Type of Return, later. If the predecessor was required to  
file Form 940, see the line 5 instructions.  
When Must You Deposit Your FUTA  
Tax?  
Although Form 940 covers a calendar year, you may have  
to deposit your FUTA tax before you file your return. If your  
FUTA tax is more than $500 for the calendar year, you  
must deposit at least one quarterly payment.  
Figure Your Tax Liability  
Before you can figure the amount to deposit, figure your  
FUTA tax liability for the quarter. To figure your tax liability,  
add the first $7,000 of each employee's annual wages you  
paid during the quarter for FUTA wages paid and multiply  
that amount by 0.006.  
The tax rates are based on your receiving the maximum  
credit against FUTA taxes. You’re entitled to the maximum  
credit if you paid all state unemployment tax by the due  
date of your Form 940 or if you weren't required to pay  
state unemployment tax during the calendar year due to  
your state experience rate.  
Example. During the first quarter, you had three  
employees: Mary Smith, George Jones, and Jane Moore.  
You paid $11,000 to Mary, $2,000 to George, and $4,000  
to Jane. None of the payments made were exempt from  
FUTA tax.  
You must determine when to deposit your tax based on  
the amount of your quarterly tax liability. If your FUTA tax is  
$500 or less in a quarter, carry it over to the next quarter.  
Continue carrying your tax liability over until your  
cumulative tax is more than $500. At that point, you must  
deposit your tax for the quarter. Deposit your FUTA tax by  
the last day of the month after the end of the quarter. If  
your tax for the next quarter is $500 or less, you’re not  
required to deposit your tax again until the cumulative  
amount is more than $500.  
Fourth quarter liabilities. If your FUTA tax for the fourth  
quarter (plus any undeposited amounts from earlier  
quarters) is more than $500, deposit the entire amount by  
January 31, 2024. If it is $500 or less, you can either  
deposit the amount or pay it with your Form 940 by  
January 31, 2024.  
To figure your liability for the first quarter, add the first $7,000 of each  
employee's wages subject to FUTA tax:  
$7,000 Mary’s wages subject to FUTA tax  
2,000 George's wages subject to FUTA tax  
+ 4,000 Jane's wages subject to FUTA tax  
$13,000 Total wages subject to FUTA tax for the first quarter  
In years when there are credit reduction states,  
you must include liabilities owed for credit reduction  
with your fourth quarter deposit.  
$13,000 Total wages subject to FUTA tax for the first quarter  
x 0.006 Tax rate (based on maximum credit of 5.4%)  
$78 Your liability for the first quarter  
In this example, you don't have to make a deposit because your liability is  
$500 or less for the first quarter. However, you must carry this liability over  
to the second quarter.  
If any wages subject to FUTA tax aren't subject to state  
unemployment tax, you may be liable for FUTA tax at the  
maximum rate of 6.0%. For instance, in certain states,  
Instructions for Form 940 (2023)  
-5-  
 
wages paid to corporate officers, certain payments of sick  
pay by unions, and certain fringe benefits are excluded  
from state unemployment tax.  
Example. Mary Smith and George Jones are  
corporate officers whose wages are excluded from state  
unemployment tax in your state. Jane Moore’s wages  
aren't excluded from state unemployment tax. During the  
first quarter, you paid $11,000 to Mary, $2,000 to George,  
and $4,000 to Jane.  
availability, deadlines, and costs. Your financial institution  
may charge you a fee for payments made this way. To  
learn more about the information you will need to give your  
financial institution to make a same-day wire payment, go  
Timeliness of federal tax deposits. If a deposit is  
required to be made on a day that isn't a business day, the  
deposit is considered timely if it is made by the close of  
the next business day. A business day is any day other  
than a Saturday, Sunday, or legal holiday. The term “legal  
holiday” for deposit purposes includes only those legal  
holidays in the District of Columbia. Legal holidays in the  
District of Columbia are provided in section 11 of Pub. 15.  
$ 9,000 Total FUTA wages for Mary and George in first quarter  
x 0.060 Tax rate  
$540 Your liability for the first quarter for Mary and George  
How Can You Avoid Penalties and  
Interest?  
$4,000 Total FUTA wages subject to state unemployment tax  
x 0.006 Tax rate (based on maximum credit of 5.4%)  
$24 Your liability for the first quarter for Jane  
You can avoid paying penalties and interest if you do all of  
$540 Your liability for the first quarter for Mary and George  
+ 24 Your liability for first quarter for Jane  
$564 Your liability for the first quarter for Mary, George, and Jane  
the following.  
Deposit and pay your tax when it is due.  
File your fully completed Form 940 accurately and on  
time.  
In this example, you must deposit $564 by April 30 because your liability  
for the first quarter is more than $500.  
Attach Schedule R (Form 940) if required.  
Ensure your tax payments are honored by your financial  
institution.  
How Must You Deposit Your FUTA  
Tax?  
Penalties and interest are charged on taxes paid late  
and returns filed late at a rate set by law. See sections 11  
and 12 of Pub. 15 for details.  
You Must Deposit Your FUTA Tax Using EFT  
Use Form 843 to request abatement of assessed  
penalties or interest. Don't request abatement of assessed  
penalties or interest on Form 940.  
You must use EFT to make all federal tax deposits.  
Generally, an EFT is made using EFTPS. If you don't want  
to use EFTPS, you can arrange for your tax professional,  
financial 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 your behalf. EFTPS is a free  
service provided by the Department of the Treasury.  
Services provided by your tax professional, financial  
institution, payroll service, or other third party may have a  
fee.  
If you receive a notice about a penalty after you file this  
return, reply to the notice with an explanation and we will  
determine if you meet reasonable-cause criteria. Don't  
attach an explanation when you file your return.  
Can You Amend a Return?  
Beginning sometime in 2024, the IRS expects to  
make filing an amended Form 940 available as  
part of Modernized e-File (MeF). Monitor IRS.gov  
TIP  
For more information on making federal tax deposits,  
see Pub. 966. To get more information about EFTPS or to  
enroll in EFTPS, go to EFTPS.gov or call one of the  
numbers provided under Federal tax deposits must be  
for more information on availability.  
You use the 2023 Form 940 to amend a return that you  
previously filed for 2023. If you’re amending a return for a  
previous year, use that previous year's Form 940.  
Follow the steps below to amend your return.  
If your business is new, the IRS will automatically  
pre-enroll you in EFTPS when you apply for an EIN. Follow  
the instructions on your EIN package to activate your  
enrollment.  
Use a paper return to amend a Form 940, even if the  
Form 940 was filed electronically, until the ability to file an  
amended Form 940 electronically becomes available.  
Check the amended return box in the top right corner of  
For an EFTPS deposit to be on time, you must  
Form 940, page 1, box a.  
Fill in all the amounts that should have been on the  
submit the deposit by 8 p.m. Eastern time the day  
!
CAUTION  
before the date the deposit is due.  
original form.  
Same-day wire payment option. If you fail to submit a  
deposit transaction on EFTPS by 8 p.m. Eastern time the  
day before the date a deposit is due, you can still make  
your deposit on time by using the Federal Tax Collection  
Service (FTCS) to make a same-day wire payment. To use  
the same-day wire payment method, you will need to  
make arrangements with your financial institution ahead of  
time. Please check with your financial institution regarding  
Sign the form.  
Attach an explanation, including an attachment in MeF  
if filing the amended return electronically, telling us why  
you’re amending your return. For example, tell us if you’re  
filing to claim credit for tax paid to your state  
unemployment fund after the due date of Form 940.  
Unless filing the amended return electronically, file the  
amended return using the Without a payment address  
-6-  
Instructions for Form 940 (2023)  
 
(even if a payment is included) under Where Do You File,  
earlier) or call the IRS at 800-829-4933 (toll free). If you're  
outside the United States, call 267-941-1000 (toll call).  
earlier.  
If you file an amended return for an aggregate Form  
If you don't have an EIN, you may apply for one by  
going to IRS.gov/EIN. You may also apply for an EIN by  
faxing or mailing Form SS-4 or SS-4 (sp) to the IRS. If the  
principal business was created or organized outside the  
United States or U.S. territories, you may also apply for an  
EIN by calling 267-941-1099 (toll call). If you haven’t  
received your EIN by the due date of Form 940, write  
“Applied For” and the date you applied in the space shown  
for the number.  
940, be sure to attach Schedule R (Form 940). Complete  
Schedule R (Form 940) only for employers who have  
adjustments on the amended Form 940.  
Completing Your Form 940  
Follow These Guidelines To Correctly Fill Out  
the Form  
Make entries on Form 940 as follows to enable accurate  
scanning and processing.  
If you’re filing your tax return electronically, a valid  
EIN is required at the time the return is filed. If a  
!
Make sure your business name and EIN are on every  
CAUTION  
valid EIN isn't provided, the return won't be  
page of the form and any attachments.  
accepted. This may result in penalties.  
If you type or use a computer to fill out your form, use a  
12-point Courier font, if possible. Portable Document  
Format (PDF) forms on IRS.gov have fillable fields with  
acceptable font specifications.  
Always be sure the EIN on the form you file exactly  
matches the EIN that the IRS assigned to your  
business. Don't use a social security number  
TIP  
Don't enter dollar signs and decimal points. Commas  
(SSN) or individual taxpayer identification number (ITIN)  
on forms that ask for an EIN. Filing a Form 940 with an  
incorrect EIN or using the EIN of another's business may  
result in penalties and delays in processing your return.  
are optional. Enter dollars to the left of the preprinted  
decimal point and cents to the right of it.  
You may choose to round your amounts to the nearest  
dollar, instead of reporting cents on this form. If you  
choose to round, you must round all entries. To round,  
drop the amounts under 50 cents and increase the  
amounts from 50 to 99 cents to the next dollar. For  
example, $1.49 becomes $1.00 and $2.50 becomes  
$3.00. If you use two or more amounts to figure an entry  
on the form, use cents to figure the answer and round the  
answer only.  
Tell Us if You Change Your Business Name,  
Business Address, or Responsible Party  
Notify the IRS immediately if you change your business  
name, business address, or responsible party.  
Name change. Write to the IRS office where you filed  
your return (using the Without a payment address under  
Where Do You File, earlier) to notify the IRS of any name  
change. See Pub. 1635 to see if you also need to apply for  
a new EIN.  
Address or responsible party change. Complete and  
mail Form 8822-B to notify the IRS of an address or  
responsible party change. Don’t mail Form 8822-B with  
your Form 940. For a definition of "responsible party," see  
the Instructions for Form SS-4.  
If you have a line with the value of zero, leave it blank.  
Employer Identification Number (EIN),  
Name, Trade Name, and Address  
Enter Your Business Information at the Top of  
the Form  
Enter your EIN, name, and address in the spaces  
provided. You must enter your name and EIN here and on  
page 2. Enter the business (legal) name that you used  
when you applied for your EIN on Form SS-4. For  
example, if you’re a sole proprietor, enter “Ronald Smith”  
on the Name line and “Ron's Cycles” on the Trade Name  
line. Leave the Trade Name line blank if it is the same as  
your Name.  
Type of Return  
Review the box at the top of the form. If any line applies to  
you, check the appropriate box to tell us which type of  
return you’re filing. You may check more than one box.  
Amended. If this is an amended return that you’re filing to  
correct a return that you previously filed, check box a.  
If you pay a tax preparer to fill out Form 940, make sure  
the preparer shows your business name exactly as it  
appeared when you applied for your EIN.  
Successor employer. Check box b if you're a successor  
employer and:  
Employer identification number (EIN). To make sure  
that businesses comply with federal tax laws, the IRS  
monitors tax filings and payments by using a numerical  
system to identify taxpayers. A unique nine-digit EIN is  
assigned to all corporations, partnerships, and some sole  
proprietors. Businesses needing an EIN must apply for a  
number and use it throughout the life of the business on all  
tax returns, payments, and reports.  
Your business should have only one EIN. If you have  
more than one and aren't sure which one to use, write to  
the IRS office where you file your returns (using the  
Without a payment address under Where Do You File,  
You’re reporting wages paid before you acquired the  
business by a predecessor who was required to file a  
Form 940 because the predecessor was an employer for  
FUTA tax purposes, or  
You’re claiming a special credit for state unemployment  
tax paid before you acquired the business by a  
predecessor who wasn't required to file a Form 940  
because the predecessor wasn't an employer for FUTA  
tax purposes.  
A successor employer is an employer who:  
Acquires substantially all the property used in a trade or  
business of another person (predecessor) or used in a  
separate unit of a trade or business of a predecessor; and  
Instructions for Form 940 (2023)  
-7-  
     
Immediately after the acquisition, employs one or more  
1b. More than one state (you’re a multi-state employ-  
er). Check the box on line 1b. Then, fill out Schedule A  
(Form 940) and attach it to your Form 940.  
people who were employed by the predecessor.  
No payments to employees in 2023. If you’re not liable  
for FUTA tax for 2023 because you made no payments to  
employees in 2023, check box c. Then, go to Part 7, sign  
the form, and file it with the IRS.  
Final: Business closed or stopped paying wages. If  
this is a final return because you went out of business or  
stopped paying wages and you won't be liable for filing  
Form 940 in the future, check box d. Complete all  
applicable lines on the form, sign it in Part 7, and file it with  
the IRS. Also attach a statement to your return showing  
the name of the person keeping the payroll records and  
the address where those records will be kept.  
Disregarded entities. A disregarded entity is required to  
file Form 940 using its name and EIN, not the name and  
EIN of its owner. An entity that has a single owner and is  
disregarded as separate from its owner for federal income  
tax purposes is treated as a separate entity for purposes  
of payment and reporting federal employment taxes. If the  
entity doesn't currently have an EIN, it must apply for one  
using one of the methods under Employer identification  
number (EIN), earlier. Disregarded entities include  
single-owner limited liability companies (LLCs) that  
haven't elected to be taxed as a corporation for federal  
income tax purposes, QSubs, and certain foreign entities  
treated as disregarded entities for U.S. income tax  
purposes. Although a disregarded entity is treated as a  
separate entity for employment tax purposes, it isn't  
subject to FUTA tax if it is owned by a tax-exempt  
organization under section 501(c)(3) and isn't required to  
file Form 940. For more information, see Disregarded  
entities and qualified subchapter S subsidiaries in the  
Introduction section of Pub. 15.  
2. If You Paid Wages in a State That Is Subject to  
Credit Reduction  
A state that hasn't repaid money it borrowed from the  
federal government to pay unemployment benefits is  
called a credit reduction state. The U.S. Department of  
Labor determines which states are credit reduction states.  
If you paid wages that are subject to the unemployment  
tax laws of a credit reduction state, you may have to pay  
more FUTA tax when filing your Form 940.  
For tax year 2023, there are credit reduction states. If  
you paid wages subject to the unemployment tax laws of  
these states, check the box on line 2 and fill out  
Schedule A (Form 940). See the instructions for line 9  
before completing the Schedule A (Form 940).  
Part 2: Determine Your FUTA Tax  
Before Adjustments  
If any line in Part 2 doesn't apply, leave it blank.  
3. Total Payments to All Employees  
Report the total payments you made during the calendar  
year on line 3. Include payments for the services of all  
employees, even if the payments aren't taxable for FUTA.  
Your method of payment doesn't determine whether  
payments are wages. You may have paid wages hourly,  
daily, weekly, monthly, or yearly. You may have paid wages  
for piecework or as a percentage of profits. Include the  
following.  
Compensation, such as the following.  
—Salaries, wages, commissions, fees, bonuses,  
vacation allowances, and amounts you paid to  
full-time, part-time, or temporary employees.  
Fringe benefits, such as the following.  
Specific Instructions  
Part 1: Tell Us About Your Return  
1. If You Were Required To Pay Your State  
Unemployment Tax In . . .  
—Sick pay (including third-party sick pay if liability is  
transferred to the employer). For details on sick pay,  
see Pub. 15-A, Employer's Supplemental Tax Guide.  
—The value of goods, lodging, food, clothing, and  
non-cash fringe benefits.  
You must complete line 1a or line 1b even if you  
weren’t required to pay any state unemployment  
!
—Section 125 (cafeteria) plan benefits.  
CAUTION  
tax because your state unemployment tax rate(s)  
Retirement/Pension, such as the following.  
was zero. You may leave lines 1a and 1b blank only if all of  
the wages you paid to all employees in all states were  
excluded from state unemployment tax. If you leave lines  
1a and 1b blank, and line 7 is more than zero, you must  
complete line 9 because all of the taxable FUTA wages  
you paid were excluded from state unemployment tax.  
—Employer contributions to a 401(k) plan, payments  
to an Archer MSA, payments under adoption  
assistance programs, and contributions to SIMPLE  
retirement accounts (including elective salary  
reduction contributions).  
—Amounts deferred under a non-qualified deferred  
compensation plan.  
Identify the state(s) where you were required to pay  
state unemployment taxes.  
Other payments, such as the following.  
1a. One state only. Enter the two-letter U.S. Postal  
Service abbreviation for the state where you were required  
to pay your state unemployment tax on line 1a. For a list of  
state abbreviations, see the Schedule A (Form 940)  
instructions or go to the website for the U.S. Postal  
Service at USPS.com.  
—Tips of $20 or more in a month that your employees  
reported to you.  
—Payments made by a predecessor employer to the  
employees of a business you acquired.  
—Payments to nonemployees who are treated as your  
employees by the state unemployment tax agency.  
-8-  
Instructions for Form 940 (2023)  
   
Wages may be subject to FUTA tax even if they  
are excluded from your state's unemployment tax.  
—Payments for services provided to you by your  
parent, spouse, or child under the age of 21. See  
section 3 of Pub. 15.  
!
CAUTION  
—Payments for certain fishing activities. See Pub. 334,  
Tax Guide for Small Business.  
For details on wages and other compensation, see  
section 5 of Pub. 15-A.  
—Payments to certain statutory employees. See  
section 1 of Pub. 15-A.  
—Payments to nonemployees who are treated as your  
employees by the state unemployment tax agency.  
Example  
You had three employees. You paid $44,000 to Joan  
Rose, $8,000 to Sara Blue, and $16,000 to John Green.  
$44,000 Amount paid to Joan  
8,000 Amount paid to Sara  
+ 16,000 Amount paid to John  
See section 3306 and its related regulations for more  
information about FUTA taxation of retirement plan  
contributions, dependent care payments, and other  
payments.  
For more information on payments exempt from FUTA  
tax, see section 15 of Pub. 15.  
$68,000 Total payments to employees. You would enter this  
amount on line 3.  
4. Payments Exempt From FUTA Tax  
Example  
If you enter an amount on line 4, check the appropriate  
box or boxes on lines 4a through 4e to show the types of  
payments exempt from FUTA tax. You only report a  
payment as exempt from FUTA tax on line 4 if you  
included the payment on line 3.  
You had three employees. You paid $44,000 to Joan  
Rose, including $2,000 in health insurance benefits. You  
paid $8,000 to Sara Blue, including $500 in retirement  
benefits. You paid $16,000 to John Green, including  
$2,000 in health and retirement benefits.  
Some payments are exempt from FUTA tax because  
the payments aren't included in the definition of wages or  
the services aren't included in the definition of  
employment. Payments exempt from FUTA tax may  
include the following.  
$ 2,000 Health insurance benefits for Joan  
500 Retirement benefits for Sara  
+ 2,000 Health and retirement benefits for John  
$4,500 Total payments exempt from FUTA tax. You would enter  
this amount on line 4 and check boxes 4a and 4c.  
Fringe benefits, such as the following.  
—The value of certain meals and lodging.  
—Contributions to accident or health plans for  
employees, including certain employer payments to a  
health savings account or an Archer MSA.  
—Payments for benefits excluded under section 125  
(cafeteria) plans.  
5. Total of Payments Made to Each Employee in  
Excess of $7,000  
Only the first $7,000 you paid to each employee in a  
calendar year, after subtracting any payments exempt  
from FUTA tax, is subject to FUTA tax. This $7,000 is  
called the FUTA wage base.  
Group-term life insurance. For information about  
group-term life insurance and other payments for fringe  
benefits that may be exempt from FUTA tax, see Pub.  
15-B.  
Enter on line 5 the total of the payments over the FUTA  
wage base you paid to each employee during 2023 after  
subtracting any payments exempt from FUTA tax  
shown on line 4.  
Retirement/Pension, such as employer contributions  
to a qualified plan, including a SIMPLE retirement account  
(other than elective salary reduction contributions) and a  
401(k) plan.  
Following Our Example  
Dependent care, such as payments (up to $5,000 per  
employee, $2,500 if married filing separately) for a  
qualifying person's care that allows your employees to  
work and that would be excludable by the employee under  
section 129.  
You had three employees. You paid $44,000 to Joan Rose, $8,000 to  
Sara Blue, and $16,000 to John Green, including a total of $4,500 in  
payments exempt from FUTA tax for all three employees. To  
determine the total payments made to each employee in excess of the  
FUTA wage base, the payments exempt from FUTA tax and the FUTA  
wage base must be subtracted from total payments. These amounts  
are shown in parentheses.  
Other payments, such as the following.  
—All non-cash payments and certain cash payments  
for agricultural labor, and all payments to “H-2A” visa  
workers. See For Agricultural Employers, earlier, or  
Pub. 51.  
Employees  
Joan  
$44,000  
(2,000)  
(7,000)  
Sara  
$8,000  
(500)  
John  
$16,000  
(2,000)  
(7,000)  
Total payments to employees  
Payments exempt from FUTA tax  
FUTA wage base  
—Payments made under a workers' compensation law  
because of a work-related injury or sickness. See  
section 6 of Pub. 15-A.  
(7,000)  
$35,000  
$
500  
$ 7,000  
$42,500  
—Payments for domestic services if you didn't pay  
cash wages of $1,000 or more (for all domestic  
employees) in any calendar quarter in 2022 or 2023,  
or if you file Schedule H (Form 1040). See For  
926.  
Total of payments made to each employee in excess of  
the FUTA wage base. You would enter this amount on  
line 5.  
Instructions for Form 940 (2023)  
-9-  
 
9. If ALL of the Taxable FUTA Wages You Paid  
Were Excluded From State Unemployment  
Tax . . .  
If you’re a successor employer . . . When you figure  
the payments made to each employee in excess of the  
FUTA wage base, you may include the payments that the  
predecessor made to the employees who continue to  
work for you only if the predecessor was an employer for  
FUTA tax purposes resulting in the predecessor being  
required to file Form 940.  
Line 9 doesn't apply to FUTA wages on which you  
paid no state unemployment tax only because the  
!
CAUTION  
state assigned you a tax rate of 0%.  
If all of the taxable FUTA wages you paid were  
excluded from state unemployment tax, multiply line 7 by  
0.054 and enter the result on line 9.  
Example for Successor Employers  
During the calendar year, the predecessor employer paid $5,000 to Susan  
Jones. You acquired the predecessor's business. After the acquisition, you  
employed Susan and paid Susan an additional $3,000 in wages. None of  
the amounts paid to Susan were payments exempt from FUTA tax.  
line 7  
x 0.054  
line 9  
$5,000 Wages paid by predecessor employer  
+ 3,000 Wages paid by you  
$8,000 Total payments to Susan. You would include this amount on  
line 3.  
If you weren't required to pay state unemployment tax  
because all of the wages you paid were excluded from  
state unemployment tax, you must pay FUTA tax at the  
6.0% (0.060) rate. For example, if your state  
$8,000 Total payments to Susan  
– 7,000 FUTA wage base  
$1,000 Payments made to Susan in excess of the FUTA wage base  
unemployment tax law excludes wages paid to corporate  
officers or employees in specific occupations, and the only  
wages you paid were to corporate officers or employees in  
those specific occupations, you must pay FUTA tax on  
those wages at the full FUTA rate of 6.0% (0.060). When  
you figured the FUTA tax before adjustments on line 8, it  
was based on the maximum allowable credit (5.4%) for  
state unemployment tax payments. Because you didn't  
pay state unemployment tax, you don't have a credit and  
must figure this adjustment.  
$1,000 Payments made to Susan in excess of the FUTA wage base  
+ 5,000 Taxable FUTA wages paid by predecessor employer  
$6,000 You would include this amount on line 5.  
6. Subtotal  
To figure your subtotal, add the amounts on lines 4 and 5  
and enter the result on line 6.  
If line 9 applies to you, lines 10 and 11 don't apply to  
you. Therefore, leave lines 10 and 11 blank. Don't fill out  
the worksheet in these instructions. Complete Schedule A  
(Form 940) only if you’re a multi-state employer.  
line 4  
+ line 5  
line 6  
10. If SOME of the Taxable FUTA Wages You Paid  
Were Excluded From State Unemployment Tax,  
or You Paid Any State Unemployment Tax  
Late . . .  
7. Total Taxable FUTA Wages  
To figure your total taxable FUTA wages, subtract line 6  
from line 3 and enter the result on line 7.  
line 3  
− line 6  
You must fill out the worksheet on the next page if:  
Some of the taxable FUTA wages you paid were  
line 7  
excluded from state unemployment tax, or  
Any of your payments of state unemployment tax were  
late.  
The worksheet takes you step by step through the process  
of figuring your credit. At the end of the worksheet you'll  
find an example of how to use it. Don't complete the  
worksheet if line 9 applied to you (see the instructions for  
line 9, earlier).  
8. FUTA Tax Before Adjustments  
To figure your total FUTA tax before adjustments, multiply  
line 7 by 0.006 and then enter the result on line 8.  
line 7  
x 0.006  
Before you can properly fill out the worksheet, you  
will need to gather the following information.  
line 8  
Taxable FUTA wages (Form 940, line 7).  
Taxable state unemployment wages (state and federal  
wage bases may differ).  
Part 3: Determine Your Adjustments  
If any line in Part 3 doesn't apply, leave it blank.  
The experience rates assigned to you by the states  
where you paid wages.  
The amount of state unemployment taxes you paid on  
time. “On time” means that you paid the state  
unemployment taxes by the due date for filing Form 940.  
The amount of state unemployment taxes you paid late.  
“Late” means after the due date for filing Form 940.  
-10-  
Instructions for Form 940 (2023)  
   
Don't include any penalties, interest, or  
unemployment taxes deducted from your  
employees' pay in the amount of state  
each assigned experience rate separately on the  
worksheet.  
!
CAUTION  
If you were assigned six or more experience rates that  
unemployment taxes. Also, don't include as state  
unemployment taxes any special administrative taxes or  
voluntary contributions you paid to get a lower assigned  
experience rate or any surcharges, excise taxes, or  
employment and training taxes. These items are generally  
listed as separate items on the state's quarterly wage  
report.  
were less than 5.4% for any part of the calendar year, you  
must use another sheet to figure the additional credits and  
then include those additional credits in your line 3 total.  
After you complete the worksheet, enter the amount  
from line 7 of the worksheet on Form 940, line 10. Don't  
attach the worksheet to your Form 940. Keep it with  
your records.  
For line 3 of the worksheet:  
If any of the experience rates assigned to you were less  
than 5.4% for any part of the calendar year, you must list  
Instructions for Form 940 (2023)  
-11-  
Worksheet—Line 10  
Keep for Your Records  
Read the Example on the next page before completing this worksheet.  
Before you begin:  
Use this worksheet to figure your credit if:  
Some of the wages you paid were excluded from state unemployment tax, OR  
You paid any state unemployment tax late.  
For this worksheet, don't round your figures.  
Before you can properly fill out this worksheet, you must gather the following information.  
Taxable FUTA wages (Form 940, line 7).  
Taxable state unemployment wages.  
The experience rates assigned to you by the states where you paid wages.  
The amount of state unemployment taxes you paid on time. “On time” means that you paid the state unemployment taxes by the due date for filing Form 940.  
Include any state unemployment taxes you paid on nonemployees who were treated as employees by your state unemployment agency.  
The amount of state unemployment taxes you paid late. “Late” means after the due date for filing Form 940.  
1. Maximum allowable credit — Enter Form 940, line 7  
.
x
0.054 on line 1  
1.  
2.  
.
.
(Form 940, line 7 x 0.054 = line 1).  
2. Credit for timely state unemployment tax payments — How much did you pay on time?  
STOP  
If line 2 is equal to or more than line 1, STOP here.  
If line 2 is less than line 1, continue this worksheet.  
You’ve completed the worksheet. Leave Form 940, line 10, blank.  
3. Additional credit — Were ALL of your assigned experience rates 5.4% or more?  
If yes, enter zero on line 3. Then, go to line 4 of this worksheet.  
If no, fill out the computations below. List ONLY THOSE STATES for which your assigned experience rate for any part of the  
calendar year was less than 5.4%.  
State  
Computation rate  
Taxable state  
Additional credit  
unemployment wages at  
assigned experience rate  
The difference between 5.4%  
(0.054) and your assigned  
experience rate (0.054 – .XXX  
(assigned experience rate) =  
computation rate)  
1.  
2.  
3.  
4.  
5.  
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If you need more lines, use another sheet and include those  
additional credits in the total.  
Total  
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Enter the total on line 3.  
3.  
4.  
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4. Subtotal (line 2 + line 3 = line 4)  
STOP  
If line 4 is equal to or more than line 1, STOP here.  
If line 4 is less than line 1, continue this worksheet.  
You’ve completed the worksheet. Leave Form 940, line 10, blank.  
5. Credit for paying state unemployment taxes late:  
5a. What is your remaining allowable credit? (line 1 – line 4 = line 5a)  
5b. How much state unemployment tax did you pay late?  
5a.  
5b.  
5c.  
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5c. Which is smaller, line 5a or line 5b? Enter the smaller number here.  
5d. Your allowable credit for paying state unemployment taxes late (line 5c x 0.900 = line 5d)  
6. Your FUTA credit (line 4 + line 5d = line 6)  
5d.  
6.  
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STOP  
If line 6 is equal to or more than line 1, STOP here.  
If line 6 is less than line 1, continue this worksheet.  
You’ve completed the worksheet. Leave Form 940, line 10, blank.  
7. Your adjustment (line 1 – line 6 = line 7)  
Enter line 7 from this worksheet on  
Form 940, line 10.  
7.  
.
Don't attach this worksheet to your Form 940. Keep it for your records.  
-12-  
Instructions for Form 940 (2023)  
 
11. If Credit Reduction Applies . . .  
Example for Using the Worksheet  
If you paid FUTA taxable wages that were also subject to  
state unemployment taxes in any states that are subject to  
credit reduction, enter the total amount from Schedule A  
(Form 940) on Form 940, line 11. However, if you entered  
an amount on line 9 because all the FUTA taxable wages  
you paid were excluded from state unemployment tax,  
skip line 11 and go to line 12.  
Jill Brown and Tom White are corporate officers whose wages are  
excluded from state unemployment tax in your state. Jack Davis’s wages  
aren't excluded from state unemployment tax. During 2023, you paid  
$44,000 to Jill, $22,000 to Tom, and $16,000 to Jack. Your state's wage  
base is $8,000. You paid some state unemployment tax on time, some  
late, and some remains unpaid.  
Here are the records:  
Part 4: Determine Your FUTA Tax and  
Balance Due or Overpayment  
Total taxable FUTA wages (Form 940, line 7)  
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$21,000.00  
$ 8,000.00  
0.041 (4.1%)  
$100.00  
Taxable state unemployment wages  
Experience rate for 2023  
State unemployment tax paid on time  
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If any line in Part 4 doesn't apply, leave it blank.  
State unemployment tax paid late  
State unemployment tax not paid  
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.
$78.00  
$150.00  
12. Total FUTA Tax After Adjustments  
Add the amounts shown on lines 8, 9, 10, and 11, and  
enter the result on line 12.  
.
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1. Maximum allowable credit  
$21,000.00 (Form 940, line 7)  
x 0.054 (maximum credit rate)  
$1,134.00  
line 8  
line 9  
line 10  
+ line 11  
1. $1,134.00  
2. Credit for timely state unemployment tax  
payments  
2.  
$100.00  
line 12  
3. Additional credit  
0.054 (maximum credit rate)  
– 0.041 (your experience rate)  
0.013 (your computation rate)  
$8,000  
x 0.013  
$104.00 3.  
If line 9 is greater than zero, lines 10 and 11 must  
be zero because they don't apply.  
!
$104.00  
$204.00  
CAUTION  
4. Subtotal (line 2 + line 3)  
13. FUTA Tax Deposited for the Year  
Enter the amount of FUTA tax that you deposited for the  
year, including any overpayment that you applied from a  
prior year.  
$100.00  
+ 104.00  
$204.00  
4.  
5. Credit for paying state unemployment taxes late  
14. Balance Due  
5a.  
Remaining allowable credit (line 1 – line 4)  
If line 13 is less than line 12, enter the difference on  
line 14.  
$1,134.00  
– 204.00  
$930.00  
5a.  
5b.  
5c.  
$930.00  
$78.00  
$78.00  
line 12  
– line 13  
line 14  
5b.  
5c.  
5d.  
State unemployment tax paid late  
Which is smaller, line 5a or line 5b?  
Allowable credit (for paying  
late)  
$78.00  
x 0.900  
$70.20  
If line 14 is:  
More than $500, you must deposit your tax. See When  
5d.  
6.  
$70.20  
$274.20  
$859.80  
$500 or less, you can deposit your tax, pay your tax with  
6. Your FUTA credit (line 4 + line 5d)  
a credit card or debit card, pay your tax by EFW if filing  
electronically, or pay your tax by check or money order  
with your return. For more information on electronic  
payment options, go to IRS.gov/Payments.  
$204.00  
+ 70.20  
$274.20  
Less than $1, you don't have to pay it.  
7. Your adjustment (line 1 – line 6)  
$1,134.00  
– 274.20  
$859.80  
If you don't deposit as required and pay any  
balance due with Form 940, you may be subject to  
!
CAUTION  
a penalty.  
7.  
You would enter line 7 from this worksheet  
on Form 940, line 10.  
If you pay by EFT, credit card, or debit card, file your  
return using the Without a payment address under Where  
Do You File, earlier. Don't file Form 940-V, Payment  
Voucher.  
Instructions for Form 940 (2023)  
-13-  
To figure your FUTA tax liability for the fourth quarter,  
complete Form 940 through line 12. Then, copy the  
amount from line 12 onto line 17. Lastly, subtract the sum  
of lines 16a through 16c from line 17 and enter the result  
on line 16d.  
What if you can't pay in full? If you can't pay the full  
amount of tax you owe, you can apply for an installment  
agreement online. You can apply for an installment  
agreement online if:  
You can't pay the full amount shown on line 14,  
The total amount you owe is $25,000 or less, and  
You can pay the liability in full in 24 months.  
Example  
You paid wages on March 28 and your FUTA tax on those wages was  
$200. You weren't required to make a deposit for the 1st quarter  
because your accumulated FUTA tax was $500 or less. You paid  
additional wages on June 28 and your FUTA tax on those wages was  
$400. Because your accumulated FUTA tax for the 1st and 2nd  
quarters exceeded $500, you were required to make a deposit of $600  
by July 31.  
To apply using the Online Payment Agreement  
Application, go to IRS.gov/OPA.  
Under an installment agreement, you can pay what you  
owe in monthly installments. There are certain conditions  
you must meet to enter into and maintain an installment  
agreement, such as paying the liability within 24 months,  
and making all required deposits and timely filing tax  
returns during the length of the agreement.  
If your installment agreement is accepted, you will be  
charged a fee and you will be subject to penalties and  
interest on the amount of tax not paid by the due date of  
the return.  
You would enter $200 on line 16a because your liability for the 1st  
quarter is $200. You would also enter $400 on line 16b to show your  
2nd quarter liability.  
In years when there are credit reduction states,  
you must include liabilities owed for credit  
TIP  
15. Overpayment  
If line 13 is more than line 12, enter the difference on  
line 15.  
reduction with your fourth quarter deposit. You  
may deposit the anticipated extra liability throughout the  
year, but it isn't due until the due date for the deposit for  
the fourth quarter, and the associated liability should be  
recorded as being incurred in the fourth quarter.  
line 13  
– line 12  
17. Total Tax Liability for the Year  
line 15  
Your total tax liability for the year must equal line 12. Copy  
the amount from line 12 onto line 17.  
If you deposited more than the FUTA tax due for the  
year, you may choose to have us either:  
Part 6: May We Speak With Your  
Third-Party Designee?  
If you want to allow an employee, your paid tax preparer,  
or another person to discuss your Form 940 with the IRS,  
check the “Yes” box. Then, enter the name and phone  
number of the person you choose as your designee. Be  
sure to give us the specific name of a person—not the  
name of the firm that prepared your tax return.  
Apply the refund to your next return, or  
Send you a refund.  
Check the appropriate box on line 15 to tell us which  
option you select. Check only one box on line 15. If you  
don’t check either box or if you check both boxes, we will  
generally apply the overpayment to your next return.  
Regardless of any box you check or don’t check, we may  
apply your overpayment to any past due tax account that  
is shown in our records under your EIN.  
Have your designee select a five-digit personal  
identification number (PIN) that they must use as  
identification when talking to the IRS about your form.  
If line 15 is less than $1, we will send you a refund or  
apply it to your next return only if you ask for it in writing.  
Part 5: Report Your FUTA Tax Liability  
by Quarter Only if Line 12 Is More  
Than $500  
By checking “Yes,” you authorize us to talk to your  
designee about any questions that we may have while we  
process your return. Your authorization applies only to this  
form, for this year; it doesn't apply to other forms or other  
tax years.  
Fill out Part 5 only if line 12 is more than $500. If line 12 is  
You’re authorizing your designee to:  
$500 or less, leave Part 5 blank and go to Part 6.  
Give us any information that is missing from your return,  
Ask us for information about processing your return,  
16. Report the Amount of Your FUTA Tax  
Liability for Each Quarter  
and  
Respond to certain IRS notices that you have shared  
Enter the amount of your FUTA tax liability for each  
quarter on lines 16a–d. Don't enter the amount you  
deposited. If you had no liability for a quarter, leave the  
line blank.  
with your designee about math errors and in preparing  
your return. We won't send notices to your designee.  
You’re not authorizing your designee to:  
16a. 1st quarter (January 1 to March 31)  
Receive any refund check,  
16b. 2nd quarter (April 1 to June 30)  
Bind you to anything (including additional tax liability),  
16c. 3rd quarter (July 1 to September 30)  
16d. 4th quarter (October 1 to December 31)  
or  
Otherwise represent you before the IRS.  
-14-  
Instructions for Form 940 (2023)  
   
The authorization will automatically expire 1 year after  
the due date for filing your Form 940 (regardless of  
extensions). If you or your designee wants to end the  
authorization before it expires, write to the IRS office for  
your location using the Without a payment address under  
Where Do You File, earlier.  
If you want to expand your designee's authorization or if  
you want us to send your designee copies of your notices,  
see Pub. 947.  
enter the firm's name and the EIN of the firm. You can  
apply for a PTIN online or by filing Form W-12. For more  
information about applying for a PTIN online, go to  
IRS.gov/PTIN. You can't use your PTIN in place of the EIN  
of the tax preparation firm.  
Generally, don't complete the Paid Preparer Use Only  
section if you’re filing the return as a reporting agent and  
have a valid Form 8655 on file with the IRS. However, a  
reporting agent must complete this section if the reporting  
agent offered legal advice, for example, by advising the  
client on determining whether its workers are employees  
or independent contractors for federal tax purposes.  
Part 7: Sign Here (Approved Roles)  
You MUST Fill Out Both Pages of This Form and  
SIGN It  
Failure to sign will delay the processing of your return.  
On page 2 in Part 7, sign and print your name and title.  
Then, enter the date and the best daytime telephone  
number, including area code, where we can reach you if  
we have any questions.  
Privacy Act and Paperwork Reduction Act Notice. We  
ask for the information on Form 940 to carry out the  
Internal Revenue laws of the United States. We need it to  
figure and collect the right amount of tax. Subtitle C,  
Employment Taxes, of the Internal Revenue Code  
imposes unemployment tax under the Federal  
Unemployment Tax Act. Form 940 is used to determine  
the amount of the taxes that you owe. Section 6011  
requires you to provide the requested information if the tax  
is applicable to you. Section 6109 requires you to provide  
your identification number. If you fail to provide this  
information in a timely manner, or provide false or  
fraudulent information, you may be subject to penalties.  
Who Must Sign Form 940?  
The following persons are authorized to sign the return for  
each type of business entity.  
Sole proprietorship—The individual who owns the  
business.  
Partnership (including an LLC treated as a  
partnership) or unincorporated organization—A  
responsible and duly authorized partner, member, or  
officer having knowledge of its affairs.  
You’re not required to provide the information requested  
on a form that is subject to the Paperwork Reduction Act  
unless the form displays a valid OMB control number.  
Books or records relating to a form or its instructions must  
be retained as long as their contents may become  
Corporation (including an LLC treated as a  
corporation)—The president, vice president, or other  
principal officer duly authorized to sign.  
material in the administration of any Internal Revenue law.  
Single-member LLC treated as a disregarded entity  
for federal income tax purposes—The owner of the  
Generally, tax returns and return information are  
confidential, as required by section 6103. However,  
section 6103 allows or requires the IRS to disclose or give  
the information shown on your tax return to others as  
described in the Code. For example, we may disclose your  
tax information to the Department of Justice for civil and  
criminal litigation, and to cities, states, the District of  
Columbia, and U.S. commonwealths and territories to  
administer their tax laws. We may also disclose this  
information to other countries under a tax treaty, to federal  
and state agencies to enforce federal nontax criminal  
laws, or to federal law enforcement and intelligence  
agencies to combat terrorism.  
LLC or a principal officer duly authorized to sign.  
Trust or estate—The fiduciary.  
Form 940 may also be signed by a duly authorized  
agent of the taxpayer if a valid power of attorney or  
reporting agent authorization (Form 8655) has been filed.  
Alternative signature method. Corporate officers or  
duly authorized agents may sign Form 940 by rubber  
stamp, mechanical device, or computer software program.  
For details and required documentation, see Rev. Proc.  
2005-39, 2005-28 I.R.B. 82, available at IRS.gov/irb/  
Paid preparers. A paid preparer must sign Form 940 and  
provide the information in the Paid Preparer Use Only  
section of Part 7 if the preparer was paid to prepare Form  
940 and isn't an employee of the filing entity. Paid  
preparers must sign paper returns with a manual  
signature. The preparer must give you a copy of the return  
in addition to the copy to be filed with the IRS.  
If you’re a paid preparer, enter your Preparer Tax  
Identification Number (PTIN) in the space provided.  
Include your complete address. If you work for a firm,  
If you have comments concerning the accuracy of  
these time estimates or suggestions for making these  
forms simpler, we would be happy to hear from you. You  
can send us comments from IRS.gov/FormComments. Or  
you can send your comments to Internal Revenue Service,  
Tax Forms and Publications Division, 1111 Constitution  
Ave. NW, IR-6526, Washington, DC 20224. Don't send  
Form 940 to this address. Instead, see Where Do You File,  
earlier.  
Instructions for Form 940 (2023)  
-15-  
Estimated Average Times  
The time needed to complete and file this form will vary depending on individual circumstances. The estimated average  
time is:  
Form  
Recordkeeping  
Preparing, copying, assembling, and sending  
the form to the IRS  
Schedule A (Form 940)  
Worksheet (Form 940)  
16 hr., 1 min.  
1 hr., 41 min.  
15 min.  
21 min.  
-16-  
Instructions for Form 940 (2023)