Form 940: A quick guide to reporting federal unemployment tax

One of the many payroll taxes employers are accountable for is federal unemployment tax. If your small business has employees for a significant portion of the year, you’ll likely need to file IRS Form 940. So, what exactly is Form 940, how do you file it and when is the Form 940 due date? You’ll find those details and more in this post.

What is Form 940?

Form 940, officially known as Employer’s Annual Federal Unemployment (FUTA) Tax Return, is the tax form employers use to calculate their FUTA tax liability for the previous calendar year. IRS Form 940 also determines how much federal unemployment tax an employer owes at the time the return is filed.

Form 940 being filled out

Who needs to file IRS Form 940?

The 940 tax form must be filed by all businesses subject to FUTA. Whether your business is growing rapidly or just getting started, you’ll need to file if:

  • You have at least one employee during any 20 weeks of the prior or current year who works at least part of the day, OR
  • You pay at least $1,500 worth of wages to employees in any calendar quarter of the prior or current year.

If you need more clarity on if you’re required to file Form 940, Block Advisors’ small business certified tax pros can help.

Form 940 due date

Form 940 is due January 31 (or the next business day if this date falls on a weekend or holiday). This means that for 2021 tax returns, IRS Form 940 must be submitted no later than Monday, January 31, 2022.

However, it’s important to be aware that your FUTA tax payments may be due before this deadline. If your federal unemployment liability is more than $500 for the calendar year, you’ll need to make at least one quarterly payment. Quarterly deadlines are April 30, July 31, October 31 and January 31.

Filing your 940 tax form to pay unemployment tax

You can find Form 940 on the IRS website, as well as detailed instructions. The form can be filled out electronically or printed and completed.

Before you sit down to get started, make sure you know:

  • Your state unemployment tax status
  • Total wages paid to all employees for the year
  • Any changes to employee wages that are FUTA exempt

From there, you’ll calculate your payment due by subtracting any tax already paid in quarterly installments from the current amount owed.

Need more info on filing Form 940?

If you’re looking for assistance in completing IRS Form 940, our small business certified tax pros at Block Advisors can help. Make an appointment now.

We can also help with your other small business needs, including taxes, bookkeeping, and payroll, so you can get back to what you love – your business.


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