Fill out 940 (Employer's Annual Federal Unemployment Tax Return) online
Form 940 reports the annual Federal Unemployment Tax Act (FUTA) tax. FUTA tax is paid entirely by employers and funds unemployment compensation programs. It is separate from state unemployment taxes.
How to fill out 940 (Employer's Annual Federal Unemployment Tax Return)
Enter employer information
Fill in your name, address, and EIN at the top of the form. Check the applicable boxes for your situation.
Calculate FUTA tax before adjustments
Enter total payments to employees on line 3. Subtract exempt payments (line 4) and amounts over $7,000 per employee (line 5). Multiply the result by 0.006 (0.6%).
Apply state unemployment tax credits
If you paid state unemployment taxes in full and on time, you receive a credit of up to 5.4%, reducing the effective FUTA rate to 0.6%. Complete the worksheet on Part 2 if you paid in a credit reduction state.
Determine deposits and balance
Report FUTA tax deposits already made during the year on line 13. Calculate any balance due or overpayment. If the annual FUTA tax exceeds $500, quarterly deposits are required.
About 940 (Employer's Annual Federal Unemployment Tax Return)
Who needs this form
Employers who paid wages of $1,500 or more to employees in any calendar quarter, or who had one or more employees for at least some part of a day in any 20 or more different weeks during the year.
Where to submit
File Form 940 with the IRS by the deadline listed in the latest official instructions for the following year. If all FUTA tax was deposited on time, you may qualify for additional time to file; verify this in current instructions. File electronically or mail to the IRS address in the instructions.
Source and content freshness
- Reviewed: 2026-02-16
- Check the latest official form instructions for the filing year that applies to you.
- Filing deadlines may shift for weekends and holidays. Verify due dates with official instructions.
Common mistakes to avoid
- Not depositing FUTA tax quarterly when the liability exceeds $500
- Failing to claim the credit for state unemployment tax paid
- Including exempt wages (e.g., fringe benefits) in the FUTA wage base
- Missing the filing deadline, which differs from other employment tax forms
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