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What is Form 940?
Form 940 is the yearly federal unemployment tax (FUTA) return, due January 31.
What is Form 940?
Form 940 is the yearly federal unemployment tax (FUTA) return. It is due January 31 after the year ends, with 10 extra days if all FUTA was deposited on time.
Why does it matter?
Form 941 is filed every quarter. Form 940 is different: it is filed once a year and covers FUTA only.
It is the place where the credit for your state unemployment payments is applied.
The key facts
| Fact | What it means |
|---|---|
| What it is | The yearly federal unemployment tax return. |
| Due | January 31 after the year ends. |
| Extra time | 10 extra days if you deposited all FUTA on time. |
| Based on | The first $7,000 of each employee's pay, with a credit for state unemployment tax paid on time. |
| An extra schedule | Schedule A (Form 940) if you paid wages in more than one state, or in a credit reduction state. |
How does it work in StartEase Payroll?
- Open Reports & forms and choose Form 940 / FUTA (yearly).
- Use the by-quarter totals to prepare Form 940.
- File by January 31, then mark it filed with the confirmation and the receipt.
Common mistakes
- Confusing it with Form 941. They are separate returns on separate schedules.
- Forgetting Schedule A when wages were paid in more than one state.
- Entering the state rate late. The payroll is blocked until it is on file.
Related guides
FUTA and Form 940, What is FUTA? and What is Form 941?
Sources (government sites)
Next: What is Form 941?