2023 Instructions for Form 940

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2023

Instructions for Form 940

Employer's Annual Federal Unemployment (FUTA) Tax Return

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code

unless otherwise noted.

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.

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.

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.

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.

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

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

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

credit, see

Credit for State Unemployment Tax Paid to a

State Unemployment Fund, later.

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/

2023-13_IRB#REV-PROC-2023-18.

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/

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

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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.

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/

2013-52_IRB#RP-2013-39.

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.

2023-18.

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.

•

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.

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

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.

•

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

provided under Federal tax deposits must be made by

electronic funds transfer (EFT), earlier.

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

When Must You Deposit Your FUTA Tax, later). For more

information on paying your taxes with a credit or debit

card, go to IRS.gov/PayByCard.

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

Disregarded entities, later.

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/

unemploy/agencies.asp.

Photographs of missing children. The IRS is a proud

partner with the

National Center for Missing & Exploited

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.

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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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).

For a list of related employment tax topics, go to

IRS.gov/EmploymentTaxes. You can order forms,

instructions, and publications at IRS.gov/OrderForms.

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.

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.

Who Must File Form 940?

Except as noted below, if you answer “Yes” to either one of

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.

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,

see

Successor employer under Type of Return, later.

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.

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

closed or stopped paying wages under Type of Return,

later.

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

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.

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.

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?

•

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?

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.

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).

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)

organization, a section 501(c)(3) organization that is a

section 3504 agent paying wages on behalf of a

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)

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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.

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.

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.

If any due date for filing falls on a Saturday, Sunday, or

legal holiday, you may file your return on the next business

day.

Where Do You File?

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.

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,

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

Department of the Treasury

Internal Revenue Service

Kansas City, MO 64999-0046

Internal Revenue Service

P.O. Box 806531

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

local governments; and Indian tribal governments, regardless

of your location

Department of the Treasury

Internal Revenue Service

Ogden, UT 84201-0046

Internal Revenue Service

P.O. Box 932000

Louisville, KY 40293-2000

Your filing address may have changed from that

used to file your employment tax return in prior

years.

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

CAUTION

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.

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;

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•

Penalties, interest, or special administrative taxes; and

•

Voluntary amounts you paid to get a lower assigned

state experience rate.

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

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.

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

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.

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.

In years when there are credit reduction states,

you must include liabilities owed for credit reduction

with your fourth quarter deposit.

When To Deposit Your FUTA Tax

If your undeposited FUTA tax

is more than $500 on . . .* Deposit your tax by . . .

March 31 April 30

June 30 July 31

September 30 October 31

December 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

deposits, later.

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.

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.

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

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,

TIP

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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.

$ 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

$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

$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

In this example, you must deposit $564 by April 30 because your liability

for the first quarter is more than $500.

How Must You Deposit Your FUTA

Tax?

You Must Deposit Your FUTA Tax Using EFT

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.

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

made by electronic funds transfer (EFT), earlier.

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.

For an EFTPS deposit to be on time, you must

submit the deposit by 8 p.m. Eastern time the day

before the date the deposit is due.

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

CAUTION

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

IRS.gov/SameDayWire.

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.

How Can You Avoid Penalties and

Interest?

You can avoid paying penalties and interest if you do all of

the following.

•

Deposit and pay your tax when it is due.

•

File your fully completed Form 940 accurately and on

time.

•

Attach Schedule R (Form 940) if required.

•

Ensure your tax payments are honored by your financial

institution.

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.

Use Form 843 to request abatement of assessed

penalties or interest. Don't request abatement of assessed

penalties or interest on Form 940.

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

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.

•

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

Form 940, page 1, box a.

•

Fill in all the amounts that should have been on the

original form.

•

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

TIP

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(even if a payment is included) under Where Do You File,

earlier.

•

If you file an amended return for an aggregate Form

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.

•

Make sure your business name and EIN are on every

page of the form and any attachments.

•

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.

•

Don't enter dollar signs and decimal points. Commas

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.

•

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.

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.

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,

earlier) or call the IRS at 800-829-4933 (toll free). If you're

outside the United States, call 267-941-1000 (toll call).

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.

If you’re filing your tax return electronically, a valid

EIN is required at the time the return is filed. If a

valid EIN isn't provided, the return won't be

accepted. This may result in penalties.

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

(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.

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.

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.

Successor employer. Check box b if you're a successor

employer and:

•

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

CAUTION

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•

Immediately after the acquisition, employs one or more

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.

Specific Instructions

Part 1: Tell Us About Your Return

1. If You Were Required To Pay Your State

Unemployment Tax In . . .

You must complete line 1a or line 1b even if you

weren’t required to pay any state unemployment

tax because your state unemployment tax rate(s)

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.

Identify the state(s) where you were required to pay

state unemployment taxes.

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.

CAUTION

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.

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.

—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.

—Section 125 (cafeteria) plan benefits.

•

Retirement/Pension, such as the following.

—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.

•

Other payments, such as the following.

—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.

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Wages may be subject to FUTA tax even if they

are excluded from your state's unemployment tax.

For details on wages and other compensation, see

section 5 of Pub. 15-A.

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

$68,000 Total payments to employees. You would enter this

amount on line 3.

4. Payments Exempt From FUTA Tax

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.

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.

•

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.

•

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.

•

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.

•

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.

•

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.

—Payments made under a workers' compensation law

because of a work-related injury or sickness. See

section 6 of Pub. 15-A.

—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

Employers of Household Employees, earlier, or Pub.

926.

CAUTION

—Payments for services provided to you by your

parent, spouse, or child under the age of 21. See

section 3 of Pub. 15.

—Payments for certain fishing activities. See Pub. 334,

Tax Guide for Small Business.

—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.

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.

Example

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.

$ 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.

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.

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.

Following Our Example

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.

Employees Joan Sara John

Total payments to employees $44,000 $8,000 $16,000

Payments exempt from FUTA tax (2,000) (500) (2,000)

FUTA wage base (7,000) (7,000) (7,000)

$35,000 $ 500 $ 7,000

Total of payments made to each employee in excess of

the FUTA wage base. You would enter this amount on

line 5.

$42,500

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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.

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.

$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.

$8,000 Total payments to Susan

– 7,000 FUTA wage base

$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.

line 4

+ line 5

line 6

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

line 7

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

line 8

Part 3: Determine Your Adjustments

If any line in Part 3 doesn't apply, leave it blank.

9. If ALL of the Taxable FUTA Wages You Paid

Were Excluded From State Unemployment

Tax . . .

Line 9 doesn't apply to FUTA wages on which you

paid no state unemployment tax only because the

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.

line 7

x 0.054

line 9

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

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.

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.

10. If SOME of the Taxable FUTA Wages You Paid

Were Excluded From State Unemployment Tax,

or You Paid Any State Unemployment Tax

Late . . .

You must fill out the worksheet on the next page if:

•

Some of the taxable FUTA wages you paid were

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).

Before you can properly fill out the worksheet, you

will need to gather the following information.

•

Taxable FUTA wages (Form 940, line 7).

•

Taxable state unemployment wages (state and federal

wage bases may differ).

•

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.

CAUTION

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Don't include any penalties, interest, or

unemployment taxes deducted from your

employees' pay in the amount of state

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.

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

CAUTION

each assigned experience rate separately on the

worksheet.

•

If you were assigned six or more experience rates that

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.

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Worksheet—Line 10

Keep for Your Records

Read the Example on the next page before completing this worksheet.

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 begin:

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

(Form 940, line 7 x 0.054 = line 1).

. x 0.054 on line 1 1. .

2. Credit for timely state unemployment tax payments — How much did you pay on time? 2. .

• If line 2 is equal to or more than line 1, STOP here.

STOP

You’ve completed the worksheet. Leave Form 940, line 10, blank.

• If line 2 is less than line 1, continue this worksheet.

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

The difference between 5.4%

(0.054) and your assigned

experience rate (0.054 – .XXX

(assigned experience rate) =

computation rate)

Taxable state

unemployment wages at

assigned experience rate

Additional credit

1. . x . = .

2. . x . = .

3. . x . = .

4. . x . = .

5. . x . = .

If you need more lines, use another sheet and include those

additional credits in the total.

Total .

Enter the total on line 3.

3. .

4. Subtotal (line 2 + line 3 = line 4) 4. .

• If line 4 is equal to or more than line 1, STOP here.

STOP

You’ve completed the worksheet. Leave Form 940, line 10, blank.

• If line 4 is less than line 1, continue this worksheet.

5. Credit for paying state unemployment taxes late:

5a. What is your remaining allowable credit? (line 1 – line 4 = line 5a) 5a. .

5b. How much state unemployment tax did you pay late? 5b. .

5c. Which is smaller, line 5a or line 5b? Enter the smaller number here. 5c. .

5d. Your allowable credit for paying state unemployment taxes late (line 5c x 0.900 = line 5d) 5d. .

6. Your FUTA credit (line 4 + line 5d = line 6) 6. .

• If line 6 is equal to or more than line 1, STOP here.

STOP

You’ve completed the worksheet. Leave Form 940, line 10, blank.

• If line 6 is less than line 1, continue this worksheet.

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.

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Instructions for Form 940 (2023)

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Example for Using the Worksheet

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:

Total taxable FUTA wages (Form 940, line 7) ....... $21,000.00

Taxable state unemployment wages ............ $ 8,000.00

Experience rate for 2023 ................... 0.041 (4.1%)

State unemployment tax paid on time ............ $100.00

State unemployment tax paid late .............. $78.00

State unemployment tax not paid .............. $150.00

1. Maximum allowable credit

$21,000.00 (Form 940, line 7)

x 0.054 (maximum credit rate)

$1,134.00 1. $1,134.00

2. Credit for timely state unemployment tax

payments

2. $100.00

3. Additional credit

0.054 (maximum credit rate) $8,000

– 0.041 (your experience rate) x 0.013

0.013 (your computation rate) $104.00 3. $104.00

4. Subtotal (line 2 + line 3)

$100.00

+ 104.00

$204.00 4. $204.00

5. Credit for paying state unemployment taxes late

5a. Remaining allowable credit (line 1 – line 4)

$1,134.00

– 204.00

$930.00 5a. $930.00

5b. State unemployment tax paid late 5b. $78.00

5c. Which is smaller, line 5a or line 5b? 5c. $78.00

5d. Allowable credit (for paying

late)

$78.00

x 0.900

$70.20 5d. $70.20

6. Your FUTA credit (line 4 + line 5d)

$204.00

+ 70.20

$274.20 6. $274.20

7. Your adjustment (line 1 – line 6)

$1,134.00

– 274.20

$859.80

You would enter line 7 from this worksheet

on Form 940, line 10.

11. If Credit Reduction Applies . . .

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.

Part 4: Determine Your FUTA Tax and

Balance Due or Overpayment

If any line in Part 4 doesn't apply, leave it blank.

12. Total FUTA Tax After Adjustments

Add the amounts shown on lines 8, 9, 10, and 11, and

enter the result on line 12.

line 8

line 9

line 10

+ line 11

line 12

If line 9 is greater than zero, lines 10 and 11 must

be zero because they don't apply.

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.

14. Balance Due

If line 13 is less than line 12, enter the difference on

line 14.

line 12

– line 13

line 14

If line 14 is:

•

More than $500, you must deposit your tax. See When

Must You Deposit Your FUTA Tax, earlier.

•

$500 or less, you can deposit your tax, pay your tax with

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.

•

Less than $1, you don't have to pay it.

If you don't deposit as required and pay any

balance due with Form 940, you may be subject to

a penalty.

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.

CAUTION

Instructions for Form 940 (2023)

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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.

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.

15. Overpayment

If line 13 is more than line 12, enter the difference on

line 15.

line 13

– line 12

line 15

If you deposited more than the FUTA tax due for the

year, you may choose to have us either:

•

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.

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

Fill out Part 5 only if line 12 is more than $500. If line 12 is

$500 or less, leave Part 5 blank and go to Part 6.

16. Report the Amount of Your FUTA Tax

Liability for Each Quarter

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.

16a. 1

quarter (January 1 to March 31)

16b. 2

quarter (April 1 to June 30)

16c. 3

quarter (July 1 to September 30)

16d. 4

quarter (October 1 to December 31)

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.

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.

You would enter $200 on line 16a because your liability for the 1

quarter is $200. You would also enter $400 on line 16b to show your

quarter liability.

In years when there are credit reduction states,

you must include liabilities owed for credit

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.

17. Total Tax Liability for the Year

Your total tax liability for the year must equal line 12. Copy

the amount from line 12 onto line 17.

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.

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.

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.

You’re authorizing your designee to:

•

Give us any information that is missing from your return,

•

Ask us for information about processing your return,

and

•

Respond to certain IRS notices that you have shared

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:

•

Receive any refund check,

•

Bind you to anything (including additional tax liability),

•

Otherwise represent you before the IRS.

TIP

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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.

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.

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.

•

Corporation (including an LLC treated as a

corporation)—The president, vice president, or other

principal officer duly authorized to sign.

•

Single-member LLC treated as a disregarded entity

for federal income tax purposes—The owner of the

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/

2005-28_IRB#RP-2005-39.

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,

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.

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.

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

material in the administration of any Internal Revenue law.

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.

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)

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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) 16 hr., 1 min. 15 min.

Worksheet (Form 940) 1 hr., 41 min. 21 min.

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Instructions for Form 940 (2023)