Form 940

What is Form 940?

Form 940 is an IRS tax form that employers must file annually to report their Federal Unemployment Tax Act (FUTA) liability. The form calculates the total FUTA tax owed based on wages paid to employees during the year, applying the standard tax rate to the taxable wage base.

Why Form 940 Matters

Employers who have already made quarterly FUTA deposits throughout the year use Form 940 to reconcile amounts paid against the total annual liability. Any remaining balance must be submitted with the form. Filing is required for businesses that paid wages of $1,500 or more in any calendar quarter or had one or more employees for at least part of a day in 20 or more different weeks.