Form 940 is used to report your annual Federal Unemployment Tax Act (FUTA) tax. The purpose of the FUTA tax is to provide funds for paying unemployment compensation to workers who have lost their jobs. Employers pay FUTA tax and do not deduct this tax from their employee’s wages.

Do I Have to File Form 940?

You may be wondering if you have to file this form or not. If you answer yes to these questions then, you have to file Form 940.
1. In a calendar quarter, did you pay wages of $1,500 or more to employees?
2. During 20 or more different weeks, did you have one or more employees working for you at least some part of the day?

Different Situations

The rules change for different situations and different types of employees. Here is a list of special considerations you will have to look into for more information.

  • Household employees in a private home, local college, fraternity or sorority

  • Cash wages paid to farm workers

  • Indian tribal governments

  • Tax-exempt organizations

  • Employers of state and local government employees
  • When should you deposit your FUTA tax?


    Even though Form 940 covers a calendar year, you may have to deposit your FUTA tax before you file your tax return. You are going to have to deposit at least one quarterly payment if, your FUTA tax is more than $500 for the year. Make sure you pay your tax when it’s due and file your completed Form 940 with accuracy and make sure it’s sent in on time. 
    Professional Tax Advice
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