IRS Form 940

IRS Form 940


Employer’s Annual Federal Unemployment (FUTA) Tax Return

Someone who has lost his job can get unemployment compensation from the state and from the Federal government.  Employers pay for this, in the form of a tax paid to the IRS and to their state.  The federal portion of unemployment tax is filed on the IRS form 940.  It’s called Employer’s Annual Federal Unemployment Tax Return or (FUTA) for short.

FUTA tax is not collected from employees, so it is not part of withholding from the paycheck.  Employers pay federal unemployment tax on the first $7000 paid to each employee per year.  If an employee made less than $1500 in a year, then chances are the employer won’t have to file the IRS Form 940 for that employee.

Here’s  direct link to the IRS 940 form on the IRS website.  This is the 2011 IRS 940 form.  For subsequent years the link should still work as they update their website.

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