Form 940

Continuing the discussion regarding required reports for small businesses and nonprofit organizations, let’s discuss the Form 940.

Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, is used to report federal unemployment taxes paid throughout the year (partial picture included).  This form is filed annually.  Most small businesses will be required to file this form if employees were paid.  If your business does not have a payroll service provider, you will be responsible for preparing and filing this form yourself.

PLEASE NOTE: Most Tax-Exempt organizations described in section 501(c)(3) of the Internal Revenue Code are exempt from FUTA tax and from filing this form. 

Please see the link below to access the form as well as the directions:

https://www.irs.gov/forms-pubs/about-form-940

Employers do NOT withhold FUTA from employees’ wages as this is solely an employer expense. 

REMINDER: This form is due by January 31, 2020 for the 2019 fiscal year.

Most employers will pay FUTA through the Electronic Federal Tax Payment System quarterly and then reconcile those payments with this annual filing.  FUTA Liabilities of more than $500 must be paid quarterly to avoid penalties and interest.   

If you have any questions regarding completing this form or if your business/organization is required to file a report, please feel free to contact me.

Have a blessed day!