Schedule A (Form 940) - Multi-State Employer and Credit Reduction Information

2016

Instructions for Form 940

Department of the Treasury
Internal Revenue Service

Employer's Annual Federal Unemployment (FUTA) Tax Return
act as an agent for an employer, the agent files Form 2678 with
the IRS unless you’re a state or local government agency acting
as an agent under the special procedures provided in Rev. Proc.
2013-39, 2013-52 I.R.B. 830, available at www.irs.gov/irb/
2013-52_IRB/ar15.html.

Section references are to the Internal Revenue Code unless
otherwise noted.

Future Developments
For the latest information about developments related to Form
940 and its instructions, such as legislation enacted after they
were published, go to www.irs.gov/form940.

What's New
Credit reduction state. A state that hasn't repaid money it
borrowed from the federal government to pay unemployment
benefits is a “credit reduction state.” The Department of Labor
determines these states. If an employer pays wages that are
subject to the unemployment tax laws of a credit reduction state,
that employer must pay additional federal unemployment tax
when filing its Form 940.
For 2016, there are credit reduction states. If you paid any
wages that are subject to the unemployment compensation laws
of a credit reduction state, your credit against federal
unemployment tax will be reduced based on the credit reduction
rate for that credit reduction state. Use Schedule A (Form 940) to
figure the credit reduction. For more information, see the
Schedule A (Form 940) instructions or visit IRS.gov.

Reminders
If you change your business name, business address, or
responsible party. Notify the IRS immediately if you change
your business name, business address, or responsible party.
Write to the IRS office where you file your returns (using the
Without a payment address under Where Do You File, later) to
notify the IRS of any business name change. See Pub. 1635 to
see if you need to apply for a new EIN.
Complete and mail Form 8822-B to notify the IRS of a
business address or responsible party change. Don’t mail Form
8822-B with your Form 940. For a definition of “responsible
party” see the Form 8822-B instructions.
Federal tax deposits must be made by electronic funds
transfer (EFT). You must use EFT to make all federal tax
deposits. Generally, an EFT is made using the Electronic
Federal Tax Payment System (EFTPS). If you don't want to use
EFTPS, you can arrange for your tax professional, financial
institution, payroll service, or other trusted third party to make
electronic deposits on your behalf. Also, you may arrange for
your financial institution to initiate a same-day wire payment on
your behalf. EFTPS is a free service provided by the Department
of Treasury. Services provided by your tax professional, financial
institution, payroll service, or other third party may have a fee.
For more information on making federal tax deposits, see
section 11 of Pub. 15. To get more information about EFTPS or
to enroll in EFTPS, visit www.eftps.gov, or call 1-800-555-4477,
1-800-733-4829 (TDD), or 1-800-244-4829 (Spanish). Additional
information about EFTPS is also available in Pub. 966.
Aggregate Form 940 filers. Agents must complete
Schedule R (Form 940), Allocation Schedule for Aggregate
Form 940 Filers, when filing an aggregate Form 940. Aggregate
Forms 940 are filed by agents of home care service recipients
approved by the IRS under section 3504. To request approval to
Oct 31, 2016

Disregarded entities and qualified subchapter S subsidia­
ries (QSubs). Business entities that are disregarded as
separate from their owner, including qualified subchapter S
subsidiaries, are required to withhold and pay employment taxes
and file employment tax returns using the name and EIN of the
disregarded entity. For more information, see Disregarded
entities, later.
State unemployment information. When you registered as an
employer with your state, the state assigned you a state
reporting number. If you don't have a state unemployment
account and state experience tax rate, or if you have questions
about your state account, you must contact your state
unemployment agency. For a list of state unemployment
agencies, visit the U.S. Department of Labor's website at
www.workforcesecurity.doleta.gov/unemploy/agencies.asp.
You can file and pay electronically. Using electronic options
can make filing a return and paying your federal tax easier. You
can use IRS e-file to file a return and EFTPS to make deposits or
pay in full whether you rely on a tax professional or prepare your
own taxes.
For e-file, visit the IRS website at www.irs.gov/
employmentefile for additional information.
For EFTPS, visit www.eftps.gov, or call EFTPS Customer
Service at 1-800-555-4477, 1-800-733-4829 (TDD), or
1-800-244-4829 (Spanish).
Electronic funds withdrawal (EFW). If you file Form 940
electronically, you can e-file and e-pay (EFW) the balance due in
a single step using tax preparation software or through a tax
professional. However, don't use EFW to make federal tax
deposits. For more information on paying your taxes using EFW,
visit the IRS website at www.irs.gov/payments. A fee may be
charged to file electronically.
You can pay your balance due by credit or debit card. You
may pay your FUTA tax shown on line 14 using a credit or debit
card. However, don't use a credit or debit card to pay taxes that
are required to be deposited (see When Must You Deposit Your
FUTA Tax, later). For more information on paying your taxes with
a credit or debit card, visit the IRS website at www.irs.gov/
payments.
Online payment agreement. You may be eligible to apply for
an installment agreement online if you have a balance due when
you file your return. For more information, see What if you can't
pay in full, later.
Outsourcing payroll duties. You’re responsible to ensure that
tax returns are filed and deposits and payments are made, even
if you contract with a third party to perform these acts. You
remain responsible if the third party fails to perform any required
action. If you choose to outsource any of your payroll and related
tax duties (that is, withholding, reporting, and paying over social
security, Medicare, FUTA, and income taxes) to a third-party
payer, such as a payroll service provider or reporting agent, visit
IRS.gov and enter “outsourcing payroll duties” in the search box
for helpful information on this topic.

Cat. No. 13660I

paid cash wages of $1,000 or more in any calendar quarter in
2015 or 2016.

Photographs of missing children. The IRS is a proud partner
with the National Center for Missing and Exploited Children.
Photographs of missing children selected by the Center may
appear in instructions on pages that would otherwise be blank.
You can help bring these children home by looking at the
photographs and calling 1-800-THE-LOST (1-800-843-5678) if
you recognize a child.

A household employee performs household work in a:
Private home,
Local college club, or
Local chapter of a college fraternity or sorority.
Generally, employers of household employees must file
Schedule H (Form 1040) instead of Form 940.

How Can You Get More Help?

If you want more information about this form, see Pub. 15, visit
our website at IRS.gov, or call the Business and Specialty Tax
Line toll free at 1-800-829-4933 or 1-800-829-4059 (TDD/TTY
for persons who are deaf, hard of hearing, or have a speech
disability) Monday–Friday from 7:00 a.m. to 7:00 p.m. local time
(Alaska and Hawaii follow Pacific time).

However, if you have other employees in addition to
household employees, you can choose to include the FUTA
taxes for your household employees on Form 940 instead of
filing Schedule H (Form 1040). If you choose to include
household employees on your Form 940, you must also file
Form 941, Employer's QUARTERLY Federal Tax Return; Form
943, Employer's Annual Federal Tax Return for Agricultural
Employees; or Form 944, Employer's ANNUAL Federal Tax
Return; to report social security, Medicare, and any withheld
federal income taxes for your household employees. See Pub.
926 for more information.

For a list of related employment tax topics, visit IRS.gov and
enter “employment taxes” in the search box. You can order
forms, instructions, and publications at www.irs.gov/orderforms.

General Instructions:

For Agricultural Employers . . .

What's the Purpose of Form 940?

File Form 940 if you answer “Yes” to either of these questions.
Did you pay cash wages of $20,000 or more to farmworkers
during any calendar quarter in 2015 or 2016?
Did you employ 10 or more farmworkers during some part of
the day (whether or not at the same time) during any 20 or more
different weeks in 2015 or 20 or more different weeks in 2016?

These instructions give you some background information about
Form 940. They tell you who must file the form, how to fill it out
line by line, and when and where to file it.
Use Form 940 to report your annual Federal Unemployment
Tax Act (FUTA) tax. Together with state unemployment tax
systems, the FUTA tax provides funds for paying unemployment
compensation to workers who have lost their jobs. Most
employers pay both a federal and a state unemployment tax.
Only employers pay FUTA tax. Don't collect or deduct FUTA tax
from your employees' wages.

Count wages you paid to aliens who were admitted to the
United States on a temporary basis to perform farmwork
(workers with H-2A visas). However, wages paid to “H-2A visa
workers” aren't subject to FUTA tax. See Pub. 51 for more
information.

The FUTA tax applies to the first $7,000 you pay to each
employee during a calendar year after subtracting any payments
exempt from FUTA tax.

For Indian Tribal Governments . . .

Services rendered by employees of a federally recognized
Indian tribal government employer (including any subdivision,
subsidiary, or business enterprise wholly owned by the tribe) are
exempt from FUTA tax and no Form 940 is required. However,
the tribe must have participated in the state unemployment
system for the full year and be in compliance with applicable
state unemployment law. For more information, see section
3309(d).

Who Must File Form 940?
Except as noted below, if you answer “Yes” to either one of
these questions, you must file Form 940.
Did you pay wages of $1,500 or more to employees in any
calendar quarter during 2015 or 2016?
Did you have one or more employees for at least some part of
a day in any 20 or more different weeks in 2015 or 20 or more
different weeks in 2016? Count all full-time, part-time, and
temporary employees. However, if your business is a
partnership, don't count its partners.

For Tax­Exempt Organizations . . .

Religious, educational, scientific, charitable, and other
organizations described in section 501(c)(3) and exempt from
tax under section 501(a) aren't subject to FUTA tax and don't
have to file Form 940.

If your business was sold or transferred during the year, each
employer who answered “Yes” to at least one question above
must file Form 940. However, don't include any wages paid by
the predecessor employer on your Form 940 unless you’re a
successor employer. For details, see Successor employer under
Type of Return.

For Employers of State or Local
Governments. . .

Services rendered by employees of a state, political subdivision
or instrumentality of the state are exempt from FUTA tax and no
Form 940 is required.

If you’re not liable for FUTA tax for 2016 because you made
no payments to employees in 2016, check box c in the top right
corner of the form. Then go to Part 7, sign the form, and file it
with the IRS.

When Must You File Form 940?
The due date for filing Form 940 for 2016 is January 31, 2017.
However, if you deposited all your FUTA tax when it was due,
you may file Form 940 by February 10, 2017.

If you won’t be liable for filing Form 940 in the future because
your business has closed or because you stopped paying
wages, check box d in the top right corner of the form. See Final:
Business closed or stopped paying wages under Type of Return
for more information.

If we receive your return after the due date, we will treat your
return as filed on time if the envelope containing your return is
properly addressed, contains sufficient postage, and is
postmarked by the U.S. Postal Service on or before the due date
or sent by an IRS-designated private delivery service on or
before the due date. However, if you don't follow these

For Employers of Household Employees . . .

If you’re a household employer, you must pay FUTA tax on
wages that you paid to your household employees only if you
­2­

Instructions for Form 940 (2016)

State unemployment taxes are sometimes called
“contributions.” These contributions are payments that a state
requires an employer to make to its unemployment fund for the
payment of unemployment benefits. They don't include:
Any payments deducted or deductible from your employees'
pay;
Penalties, interest, or special administrative taxes; and
Voluntary amounts you paid to get a lower assigned state
experience rate.

guidelines, we will consider your return filed when it is actually
received. For a list of IRS-designated private delivery services,
see Pub. 15.

Where Do You File?
Where you file depends on whether you include a payment
(check or money order) with your return. However, mail your
amended return to the Without a payment address even if a
payment is included.
Without a
payment . . .

If you’re in . . .
Connecticut
Delaware
District of
Columbia
Florida
Georgia
Illinois
Indiana
Kentucky
Maine
Maryland
Massachusetts
Michigan
New Hampshire

New Jersey
New York
North Carolina
Ohio
Pennsylvania
Rhode Island
South Carolina
Tennessee
Vermont
Virginia
West Virginia
Wisconsin

Department of the
Treasury
Internal Revenue
Service
Cincinnati, OH
45999-0046

Internal Revenue
Service
P.O. Box 804521
Cincinnati, OH
45280-4521

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Hawaii
Idaho
Iowa
Kansas
Louisiana
Minnesota
Mississippi

Missouri
Montana
Nebraska
Nevada
New Mexico
North Dakota
Oklahoma
Oregon
South Dakota
Texas
Utah
Washington
Wyoming

Department of the
Treasury
Internal Revenue
Service
Ogden, UT
84201-0046

Internal Revenue
Service
P.O. Box 37940
Hartford, CT
06176-7940

Internal Revenue
Service
P.O. Box 409101
Ogden, UT 84409

Internal Revenue
Service
P.O. Box 37940
Hartford, CT
06176-7940

If the location of your legal
residence, principal place of
business, office, or agency isn't
listed . . .

Internal Revenue
Service
P.O. Box 409101
Ogden, UT 84409

Internal Revenue
Service
P.O. Box 37940
Hartford, CT
06176-7940

EXCEPTION for tax-exempt
organizations, Federal, State
and Local Governments, and
Indian Tribal Governments,
regardless of your location

Department of the
Treasury
Internal Revenue
Service
Ogden, UT
84201-0046

Internal Revenue
Service
P.O. Box 37940
Hartford, CT
06176-7940

CAUTION

Special credit for successor employers. You may be eligible
for a credit based on the state unemployment taxes paid by a
predecessor. You may claim this credit if you’re a successor
employer who acquired a business in 2016 from a predecessor
who wasn't an employer for FUTA purposes and, therefore,
wasn't required to file Form 940 for 2016. See section 3302(e).
You can include amounts paid by the predecessor on the
Worksheet—Line 10 as if you paid them. For details on
successor employers, see Successor employer under Type of
Return. If the predecessor was required to file Form 940, see the
line 5 instructions.

When Must You Deposit Your FUTA
Tax?
Although Form 940 covers a calendar year, you may have to
deposit your FUTA tax before you file your return. If your FUTA
tax is more than $500 for the calendar year, you must deposit at
least one quarterly payment.

Puerto Rico
U.S. Virgin Islands

!

Additional credit. You may receive an additional credit if you
have a state experience rate lower than 5.4% (0.054). This
applies even if your rate varies during the year. This additional
credit is the difference between your actual state unemployment
tax payments and the amount you would have been required to
pay at 5.4%.

With a payment . . .

You must determine when to deposit your tax based on the
amount of your quarterly tax liability. If your FUTA tax is $500 or
less in a quarter, carry it over to the next quarter. Continue
carrying your tax liability over until your cumulative tax is more
than $500. At that point, you must deposit your tax for the
quarter. Deposit your FUTA tax by the last day of the month after
the end of the quarter. If your tax for the next quarter is $500 or
less, you’re not required to deposit your tax again until the
cumulative amount is more than $500.
Fourth quarter liabilities. If your FUTA tax for the fourth
quarter (plus any undeposited amounts from earlier quarters) is
more than $500, deposit the entire amount by January 31, 2017.
If it is $500 or less, you can either deposit the amount or pay it
with your Form 940 by January 31, 2017.
In years when there are credit reduction states, you
must include liabilities owed for credit reduction with your
fourth quarter deposit.

Private delivery services can't deliver to P.O. boxes. You
must use the U.S. Postal Service to mail an item to a
P.O. box address.

When To Deposit Your FUTA Tax

Credit for State Unemployment Tax
Paid to a State Unemployment Fund
You get a credit for amounts you pay to a state (including the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands)
unemployment fund by January 31, 2017 (or February 10, 2017,
if that is your Form 940 due date). Your FUTA tax will be higher if
you don't pay the state unemployment tax timely. If you didn't
pay all state unemployment tax by the due date of Form 940, see
the line 10 instructions.
Instructions for Form 940 (2016)

If your undeposited FUTA tax
is more than $500 on . . .*

Deposit your tax by . . .

March 31
June 30
September 30
December 31

April 30
July 31
October 31
January 31

*Also, see the instructions for line 16.

If any deposit due date falls on a Saturday, Sunday, or

TIP legal holiday, you may deposit on the next business day.
See Timeliness of federal tax deposits, later.

­3­

How Do You Figure Your FUTA Tax
Liability for Each Quarter?

$ 9,000 Total FUTA wages for Employees A and B in first quarter
x 0.060 Tax rate
$540 Your liability for the first quarter for Employees A and B

You owe FUTA tax on the first $7,000 you pay to each employee
during the calendar year after subtracting any payments exempt
from FUTA tax. The FUTA tax is 6.0% (0.060) for 2016. Most
employers receive a maximum credit of up to 5.4% (0.054)
against this FUTA tax. Every quarter, you must figure how much
of the first $7,000 of each employee's annual wages you paid
during that quarter.

$4,000 Total FUTA wages subject to state unemployment tax
x 0.006 Tax rate (based on maximum credit of 5.4%)
$24

Your liability for the first quarter for Employee C

$540 Your liability for the first quarter for Employees A and B
+ 24 Your liability for first quarter for Employee C
$564

Figure Your Tax Liability

Your liability for the first quarter for Employees A, B, and C

In this example, you must deposit $564 by April 30 because your liability
for the first quarter is more than $500.

Before you can figure the amount to deposit, figure your FUTA
tax liability for the quarter. To figure your tax liability, add the first
$7,000 of each employee's annual wages you paid during the
quarter for FUTA wages paid and multiply that amount by 0.006.

How Must You Deposit Your FUTA
Tax?

The tax rates are based on your receiving the maximum
credit against FUTA taxes. You’re entitled to the maximum credit
if you paid all state unemployment tax by the due date of your
Form 940 or if you weren't required to pay state unemployment
tax during the calendar year due to your state experience rate.

You Must Deposit Your FUTA Tax Using EFT

You must use EFT to make all federal tax deposits. Generally, an
EFT is made using EFTPS. To get more information or to enroll
in EFTPS, visit EFTPS website at www.eftps.gov, or call
1-800-555-4477, 1-800-733–4829 (TDD), or 1-800-244-4829
(Spanish). Additional information about EFTPS is also available
in Pub. 966.

Example. During the first quarter, you had three employees:
Employees A, B, and C. You paid $11,000 to Employee A,
$2,000 to Employee B, and $4,000 to Employee C. None of the
payments made were exempt from FUTA tax.
To figure your liability for the first quarter, add the first $7,000 of each
employee's wages subject to FUTA tax:
$7,000 Employee A's wages subject to FUTA tax
2,000 Employee B's wages subject to FUTA tax
+ 4,000 Employee C's wages subject to FUTA tax

If your business is new, IRS will automatically pre-enroll you
in EFTPS when you apply for an EIN. Follow the instructions on
your EIN package to activate your enrollment.

!

$13,000 Total wages subject to FUTA tax for the first quarter

CAUTION

$13,000 Total wages subject to FUTA tax for the first quarter
x 0.006 Tax rate (based on maximum credit of 5.4%)

For an EFTPS deposit to be on time, you must submit
the deposit by 8 p.m. Eastern time the day before the
date the deposit is due.

Same-day wire payment option. If you fail to submit a
deposit transaction on EFTPS by 8 p.m. Eastern time the day
before the date a deposit is due, you can still make your deposit
on time by using the Federal Tax Collection Service (FTCS). To
use the same-day wire payment method, you will need to make
arrangements with your financial institution ahead of time.
Please check with your financial institution regarding availability,
deadlines, and costs. Your financial institution may charge you a
fee for payments made this way. To learn more about the
information you will need to provide to your financial institution to
make a same-day wire payment, visit the IRS website at
www.irs.gov/payments and click on Same-day wire.
Timeliness of federal tax deposits. If a deposit is required
to be made on a day that isn't a business day, the deposit is
considered timely if it is made by the close of the next business
day. A business day is any day other than a Saturday, Sunday,
or legal holiday. The term “legal holiday” for deposit purposes
includes only those legal holidays in the District of Columbia. For
a list of legal holidays, see Pub. 15.

$78 Your liability for the first quarter
In this example, you don't have to make a deposit because your liability is
$500 or less for the first quarter. However, you must carry this liability over
to the second quarter.

If any wages subject to FUTA tax aren't subject to state
unemployment tax, you may be liable for FUTA tax at the
maximum rate of 6.0%. For instance, in certain states, wages
paid to corporate officers, certain payments of sick pay by
unions, and certain fringe benefits are excluded from state
unemployment tax.
Example. Employee A and Employee B are corporate
officers whose wages are excluded from state unemployment
tax in your state. Employee C's wages aren't excluded from state
unemployment tax. During the first quarter, you paid $11,000 to
Employee A, $2,000 to Employee B, and $4,000 to Employee C.

How Can You Avoid Penalties and
Interest?
Penalties and interest are assessed at a rate set by law on taxes
paid late, returns filed late or incorrectly, insufficient payments
made, and failure to make deposits using EFT.
You can avoid paying penalties and interest if you:
Deposit or pay your tax when it is due,
File your completed Form 940 accurately and on time,
Attach Schedule R (Form 940) if required, and
Ensure your tax payments are honored by your financial
institution.
­4­

Instructions for Form 940 (2016)

If you pay a tax preparer to fill out Form 940, make sure the
preparer shows your business name exactly as it appeared
when you applied for your EIN.

If you receive a notice about a penalty after you file this
return, reply to the notice with an explanation and we will
determine if you meet reasonable-cause criteria. Don't attach an
explanation when you file your Form 940.

Employer identification number (EIN). An EIN is a unique
nine-digit number assigned to sole proprietors, corporations,
partnerships, estates, trusts, and other entities for tax filing and
reporting purposes. Businesses that need an EIN must apply for
a number and use it throughout the life of the business on all tax
returns, payments, and reports.
Your business should have only one EIN. If you have more
than one and are unsure which one to use, call 1-800-829-4933
to verify your correct EIN.
If you don't have an EIN, apply for one by:
Visiting IRS.gov and entering “EIN” in the search box, or
Filling out Form SS-4 and mailing it to the address in the
Instructions for Form SS-4 or faxing it to the number in the
Instructions for Form SS-4.
Employers outside the United States may also apply for an
EIN by calling 267-941-1099 (toll call), but domestic entities may
not apply by telephone.
If you haven't received your EIN by the time a return is due,
write “Applied For” and the date you applied in the space shown
for the EIN on pages 1 and 2 of your return.

Can You Amend a Return?
You use the 2016 Form 940 to amend a return that you
previously filed for 2016. If you’re amending a return for a
previous year, use that previous year's Form 940.
Follow the steps below to amend your return.
Use a paper return to amend a Form 940 filed under an
electronic filing program.
Check the amended return box in the top right corner of Form
940, page 1, box a.
Fill in all the amounts that should have been on the original
form.
Sign the form.
Attach an explanation of why you’re amending your return.
For example, tell us if you’re filing to claim credit for tax paid to
your state unemployment fund after the due date of Form 940.
File the amended return using the Without a payment address
(even if a payment is included) under Where Do You File.
If you file an amended return for an aggregate Form 940, be
sure to attach Schedule R (Form 940). Complete Schedule R
(Form 940) only for employers who have adjustments on the
amended Form 940.

If you’re filing your tax return electronically, a valid EIN is
required at the time the return is filed. If a valid EIN isn't
CAUTION provided, the return won't be accepted. This may result
in penalties.

!

Completing Your Form 940

Always be sure the EIN on the form you file exactly

Follow These Guidelines to Correctly Fill Out
the Form

TIP matches the EIN that the IRS assigned to your business.

Don't use a social security number (SSN) or individual
taxpayer identification number (ITIN) on forms that ask for an
EIN. Filing a Form 940 with an incorrect EIN or using the EIN of
another's business may result in penalties and delays in
processing your return.

To help us accurately scan and process your form, please follow
these guidelines.
Make sure your business name and EIN are on every page of
the form and any attachments.
If you type or use a computer to fill out your form, use a
12-point Courier font, if possible. Portable Document Format
(PDF) forms on IRS.gov have fillable fields with acceptable font
specifications.
Make sure you enter dollars to the left of the preprinted
decimal point and cents to the right.
Don't enter dollar signs or decimal points. Commas are
optional.
You may choose to round your amounts to the nearest dollar,
instead of reporting cents on this form. If you choose to round,
you must round all entries. To round, drop the amounts under 50
cents and increase the amounts from 50 to 99 cents to the next
dollar. For example, $1.49 becomes $1.00 and $2.50 becomes
$3.00. If you use two or more amounts to figure an entry on the
form, use cents to figure the answer and round the answer only.
If you have a line with the value of zero, leave it blank.

Tell Us if You Change Your Business Name or
Business Address

Notify the IRS immediately if you change your business name or
address.
Name change. Write to the IRS office where you filed your
return (using the Without a payment address under Where Do
You File, earlier) to notify the IRS of any name change. See Pub.
1635 to see if you need to also apply for a new EIN.
Address change. Complete and mail Form 8822-B to notify the
IRS of an address change. Don’t mail Form 8822-B with your
Form 940.

Type of Return

Employer Identification Number
(EIN), Name, Trade Name, and
Address

Review the box at the top of the form. If any line applies to you,
check the appropriate box to tell us which type of return you’re
filing. You may check more than one box.
Amended. If this is an amended return that you’re filing to
correct a return that you previously filed, check box a.

Enter Your Business Information at the Top of
the Form

Successor employer. Check box b if you‘re a successor
employer and:
You’re reporting wages paid before you acquired the business
by a predecessor who was required to file a Form 940 because
the predecessor was an employer for FUTA tax purposes, or
You’re claiming a special credit for state unemployment tax
paid before you acquired the business by a predecessor who
wasn't required to file a Form 940 because the predecessor
wasn't an employer for FUTA tax purposes.
A successor employer is an employer who:

Enter your EIN, name, and address in the spaces provided. You
must enter your name and EIN here and on page 2. Enter the
business (legal) name that you used when you applied for your
EIN on Form SS-4. For example, if you’re a sole proprietor, enter
“Ronald Smith” on the Name line and “Ron's Cycles” on the
Trade Name line. Leave the Trade Name line blank if it is the
same as your Name.
Instructions for Form 940 (2016)

­5­

2. If You Paid Wages in a State That is Subject
to Credit Reduction

Acquires substantially all the property used in a trade or
business of another person (predecessor) or used in a separate
unit of a trade or business of a predecessor, and
Immediately after the acquisition, employs one or more
people who were employed by the predecessor.

A state that hasn't repaid money it borrowed from the federal
government to pay unemployment benefits is called a “credit
reduction state.” The U.S. Department of Labor determines
which states are credit reduction states.

No payments to employees in 2016. If you’re not liable for
FUTA tax for 2016 because you made no payments to
employees in 2016, check box c. Then go to Part 7, sign the
form, and file it with the IRS.

If you paid wages that are subject to the unemployment tax
laws of a credit reduction state, you may have to pay more FUTA
tax when filing your Form 940.

Final: Business closed or stopped paying wages. If this is a
final return because you went out of business or stopped paying
wages and you won't be liable for filing Form 940 in the future,
check box d. Complete all applicable lines on the form, sign it in
Part 7, and file it with the IRS. Include a statement showing the
address at which your records will be kept and the name of the
person keeping the records.

For tax year 2016, there are credit reduction states. If you
paid wages subject to the unemployment tax laws of these
states, check the box on line 2 and fill out Schedule A (Form
940). See the instructions for line 9 before completing the
Schedule A (Form 940).

Part 2: Determine Your FUTA Tax
Before Adjustments

Disregarded entities. A disregarded entity is required to file
Form 940 using its name and EIN, not the name and EIN of its
owner. An entity that has a single owner and is disregarded as
separate from its owner for federal income tax purposes is
treated as a separate entity for purposes of payment and
reporting federal employment taxes. If the entity doesn't
currently have an EIN, it must apply for one using one of the
methods under Employer identification number (EIN), earlier.
Disregarded entities include single-owner limited liability
companies (LLCs) that haven't elected to be taxed as a
corporation for federal income tax purposes, qualified
subchapter S subsidiaries, and certain foreign entities treated as
disregarded entities for U.S. income tax purposes. Although a
disregarded entity is treated as a separate entity for employment
tax purposes, it isn't subject to FUTA tax if it is owned by a
tax-exempt organization under section 501(c)(3) and isn't
required to file Form 940. For more information, see Disregarded
entities and qualified subchapter S subsidiaries in the
Introduction section of Pub. 15.

If any line in Part 2 doesn't apply, leave it blank.

3. Total Payments to All Employees

Report the total payments you made during the calendar year on
line 3. Include payments for the services of all employees, even
if the payments aren't taxable for FUTA. Your method of
payment doesn't determine whether payments are wages. You
may have paid wages hourly, daily, weekly, monthly, or yearly.
You may have paid wages for piecework or as a percentage of
profits. Include:
Compensation, such as:
—Salaries, wages, commissions, fees, bonuses, vacation
allowances, and amounts you paid to full-time, part-time, or
temporary employees.
Fringe benefits, such as:
—Sick pay (including third-party sick pay if liability is
transferred to the employer). For details on sick pay, see
Pub. 15-A, Employer's Supplemental Tax Guide.
—The value of goods, lodging, food, clothing, and non-cash
fringe benefits.
—Section 125 (cafeteria) plan benefits.
Retirement/Pension, such as:
—Employer contributions to a 401(k) plan, payments to an
Archer MSA, payments under adoption assistance
programs, and contributions to SIMPLE retirement accounts
(including elective salary reduction contributions).
—Amounts deferred under a non-qualified deferred
compensation plan.
Other payments, such as:
—Tips of $20 or more in a month that your employees
reported to you.
—Payments made by a predecessor employer to the
employees of a business you acquired.
—Payments to nonemployees who are treated as your
employees by the state unemployment tax agency.

Specific Instructions
Part 1: Tell Us About Your Return
1. If You Were Required to Pay Your State
Unemployment Tax In . . .
You must complete line 1a or line 1b even if you were
not required to pay any state unemployment tax
CAUTION because your state unemployment tax rate(s) was zero.
You may leave lines 1a and 1b blank only if all of the wages you
paid to all employees in all states were excluded from state
unemployment tax. If you leave lines 1a and 1b blank, and line 7
is more than zero, you must complete line 9 because all of the
taxable FUTA wages you paid were excluded from state
unemployment tax.

!

Identify the state(s) where you were required to pay state
unemployment taxes.
1a. One state only. Enter the two-letter U.S. Postal Service
abbreviation for the state where you were required to pay your
state unemployment tax on line 1a. For a list of state
abbreviations, see the Schedule A (Form 940) instructions or
visit the website for the U.S. Postal Service at www.usps.com.

!

Wages may be subject to FUTA tax even if they are
excluded from your state's unemployment tax.

CAUTION

For details on wages and other compensation, see section 5
of Pub. 15-A.

1b. More than one state (you’re a multi­state employer).
Check the box on line 1b. Then fill out Schedule A (Form 940)
and attach it to your Form 940.

­6­

Instructions for Form 940 (2016)

Example:

For more information on payments exempt from FUTA tax,
see section 15 in Pub. 15.

You had 3 employees. You paid $44,000 to Employee A, $8,000
to Employee B, and $16,000 to Employee C.

Example:

$44,000 Amount paid to Employee A
8,000 Amount paid to Employee B
+ 16,000 Amount paid to Employee C

You had 3 employees. You paid $44,000 to Employee A
including $2,000 in health insurance benefits. You paid $8,000 to
Employee B, including $500 in retirement benefits. You paid
$16,000 to Employee C, including $2,000 in health and
retirement benefits.

$68,000 Total payments to employees. You would enter this amount on
line 3.

$ 2,000 Health insurance benefits for Employee A
500 Retirement benefits for Employee B
+ 2,000 Health and retirement benefits for Employee C

4. Payments Exempt from FUTA Tax

If you enter an amount on line 4, check the appropriate box or
boxes on lines 4a through 4e to show the types of payments
exempt from FUTA tax. You only report a payment as exempt
from FUTA tax on line 4 if you included the payment on
line 3.

$4,500 Total payments exempt from FUTA tax. You would enter this
amount on line 4 and check boxes 4a and 4c.

5. Total of Payments Made to Each Employee in
Excess of $7,000

Some payments are exempt from FUTA tax because the
payments aren't included in the definition of wages or the
services aren't included in the definition of employment.
Payments exempt from FUTA tax may include:
Fringe benefits, such as:
—The value of certain meals and lodging.
—Contributions to accident or health plans for employees,
including certain employer payments to a Health Savings
Account or an Archer MSA.
—Employer reimbursements (including payments to a third
party) for qualified moving expenses, to the extent that these
expenses would otherwise be deductible by the employee.
—Payments for benefits excluded under section 125
(cafeteria) plans.
Group term life insurance.
For information about group term life insurance and other
payments for fringe benefits that may be exempt from FUTA tax,
see Pub. 15-B.
Retirement/Pension, such as employer contributions to a
qualified plan, including a SIMPLE retirement account (other
than elective salary reduction contributions) and a 401(k) plan.
Dependent care, such as payments (up to $5,000 per
employee, $2,500 if married filing separately) for a qualifying
person's care that allows your employees to work and that would
be excludable by the employee under section 129.
Other payments, such as:
—All non-cash payments and certain cash payments for
agricultural labor, and all payments to “H-2A” visa workers.
See For Agricultural Employers, earlier, or see Pub. 51.
—Payments made under a workers' compensation law
because of a work-related injury or sickness. See section 6
of Pub. 15-A.
—Payments for domestic services if you didn't pay cash
wages of $1,000 or more (for all domestic employees) in any
calendar quarter in 2015 or 2016, or if you file Schedule H
(Form 1040). See For Employers of Household Employees,
earlier, or Pub. 926.
—Payments for services provided to you by your parent,
spouse, or child under the age of 21. See section 3 of Pub.
15.
—Payments for certain fishing activities. See Pub. 334,Tax
Guide for Small Business.
—Payments to certain statutory employees. See section 1 of
Pub. 15-A.
—Payments to nonemployees who are treated as your
employees by the state unemployment tax agency.

Only the first $7,000 you paid to each employee in a calendar
year, after subtracting any payments exempt from FUTA tax, is
subject to FUTA tax. This $7,000 is called the FUTA wage base.
Enter on line 5 the total of the payments over the FUTA wage
base you paid to each employee during 2016 after subtracting
any payments exempt from FUTA tax shown on line 4.

Following our example:
You had three employees. You paid $44,000 to Employee A, $8,000 to
Employee B, and $16,000 to Employee C, including a total of $4,500 in
payments exempt from FUTA tax for all three employees. To determine the
total payments made to each employee in excess of the FUTA wage base,
the payments exempt from FUTA tax and the FUTA wage base must be
subtracted from total payments. These amounts are shown in parentheses.
Employees
A
B
C
Total payments to employees
$44,000
$8,000
$16,000
Payments exempt from FUTA tax
(2,000)
(500)
(2,000)
FUTA wage base
(7,000)
(7,000)
(7,000)
$35,000

Total of payments made to each employee in excess of the
FUTA wage base. You would enter this amount on line 5.

$ 7,000
$42,500

If you’re a successor employer . . . When you figure the
payments made to each employee in excess of the FUTA wage
base, you may include the payments that the predecessor made
to the employees who continue to work for you only if the
predecessor was an employer for FUTA tax purposes resulting
in the predecessor being required to file Form 940.

Example for successor employers:
During the calendar year, the predecessor employer paid $5,000 to Employee A. You
acquired the predecessor's business. After the acquisition, you employed Employee A and
paid Employee A an additional $3,000 in wages. None of the amounts paid to Employee A
were payments exempt from FUTA tax.

See section 3306 and its related regulations for more
information about FUTA taxation of retirement plan
contributions, dependent care payments, and other payments.
Instructions for Form 940 (2016)

$ 500

­7­

$5,000
+ 3,000

Wages paid by predecessor employer
Wages paid by you

$8,000

Total payments to Employee A. You would include this amount on line 3.

$8,000
– 7,000

Total payments to Employee A
FUTA wage base

$1,000

Payments made to Employee A in excess of the FUTA wage base.

$1,000
+ 5,000

Payments made to Employee A in excess of the FUTA wage base.
Taxable FUTA wages paid by predecessor employer

$6,000

You would include this amount on line 5.

6. Subtotal

pay FUTA tax on those wages at the full FUTA rate of 6.0%
(0.060). When you figured the FUTA tax before adjustments on
line 8, it was based on the maximum allowable credit (5.4%) for
state unemployment tax payments. Because you didn't pay state
unemployment tax, you don't have a credit and must figure this
adjustment.

To figure your subtotal, add the amounts on lines 4 and 5 and
enter the result on line 6.
line 4
+ line 5

If line 9 applies to you, lines 10 and 11 don't apply to you.
Therefore, leave lines 10 and 11 blank. Don't fill out the
worksheet in these instructions. Complete Schedule A (Form
940) only if you’re a multi-state employer.

line 6

7. Total Taxable FUTA Wages

10. If SOME of the Taxable FUTA Wages You
Paid Were Excluded From State Unemployment
Tax, or You Paid any State Unemployment Tax
Late...

To figure your total taxable FUTA wages, subtract line 6 from
line 3 and enter the result on line 7.
line 3
− line 6

You must fill out the worksheet on the next page if:
Some of the taxable FUTA wages you paid were excluded
from state unemployment, or
Any of your payments of state unemployment tax were late.
The worksheet takes you step by step through the process of
figuring your credit. At the end of the worksheet you'll find an
example of how to use it. Don't complete the worksheet if line 9
applied to you (see the instructions for line 9 above).

line 7

8. FUTA Tax Before Adjustments

To figure your total FUTA tax before adjustments, multiply line 7
by 0.006 and then enter the result on line 8.

Before you can properly fill out the worksheet, you will
need to gather the following information.
Taxable FUTA wages (Form 940, line 7).
Taxable state unemployment wages (state and federal wage
bases may differ).
The experience rates assigned to you by the states where you
paid wages.
The amount of state unemployment taxes you paid on time.
(On time means that you paid the state unemployment taxes by
the due date for filing Form 940.)
The amount of state unemployment taxes you paid late. (Late
means after the due date for filing Form 940.)

line 7
x 0.006
line 8

Part 3: Determine Your Adjustments
If any line in Part 3 doesn't apply, leave it blank.

9. If ALL of the Taxable FUTA Wages You Paid
Were Excluded from State Unemployment
Tax. . .

!

CAUTION

Don't include any penalties, interest, or unemployment
taxes deducted from your employees' pay in the amount
CAUTION of state unemployment taxes. Also, don't include as
state unemployment taxes any special administrative taxes or
voluntary contributions you paid to get a lower assigned
experience rate or any surcharges, excise taxes, or employment
and training taxes. (These items are generally listed as separate
items on the state's quarterly wage report.)

Line 9 doesn't apply to FUTA wages on which you paid
no state unemployment tax only because the state
assigned you a tax rate of zero percent.

!

If all of the taxable FUTA wages you paid were excluded from
state unemployment tax, multiply line 7 by 0.054 and enter the
result on line 9.
line 7
x 0.054

For line 3 of the worksheet:
If any of the experience rates assigned to you were less than
5.4% for any part of the calendar year, you must list each
assigned experience rate separately on the worksheet.
If you were assigned six or more experience rates that were
less than 5.4% for any part of the calendar year, you must use
another sheet to figure the additional credits and then include
those additional credits in your line 3 total.
After you complete the worksheet, enter the amount from
line 7 of the worksheet on Form 940, line 10. Don't attach the
worksheet to your Form 940. Keep it with your records.

line 9

If you weren't required to pay state unemployment tax
because all of the wages you paid were excluded from state
unemployment tax, you must pay FUTA tax at the 6.0% (0.060)
rate. For example, if your state unemployment tax law excludes
wages paid to corporate officers or employees in specific
occupations, and the only wages you paid were to corporate
officers or employees in those specific occupations, you must

­8­

Instructions for Form 940 (2016)

Worksheet—Line 10
Before you begin:

Keep for Your Records

Read the Example on the next page before completing this worksheet.
Use this worksheet to figure your credit if:
Some of the wages you paid were excluded from state unemployment tax, OR
You paid any state unemployment tax late.

For this worksheet, don't round your figures.
Before you can properly fill out this worksheet, you must gather this information:
■ Taxable FUTA wages (Form 940, line 7)
■ Taxable state unemployment wages
■ The experience rates assigned to you by the states where you paid wages
■ The amount of state unemployment taxes you paid on time. (On time means that you paid the state unemployment taxes by the due date for filing Form 940.)
Include any state unemployment taxes you paid on nonemployees who were treated as employees by your state unemployment agency.
■ The amount of state unemployment taxes you paid late. (Late means after the due date for filing Form 940.)
1. Maximum allowable credit — Enter Form 940, line 7
(Form 940, line 7 x 0.054 = line 1).

.

x

0.054 on line 1

2. Credit for timely state unemployment tax payments — How much did you pay on time?
•
If line 2 is equal to or more than line 1, STOP here.
•

STOP

1.

.

2.

.

3.

.

4.

.

5d.

.

6.

.

7.

.

You’ve completed the worksheet. Leave Form 940, line 10 blank.

If line 2 is less than line 1, continue this worksheet.

3. Additional credit — Were ALL of your assigned experience rates 5.4% or more?
•

If yes, enter zero on line 3. Then go to line 4 of this worksheet.

•

If no, fill out the computations below. List ONLY THOSE STATES for which your assigned experience rate for any part of the
calendar year was less than 5.4%.
State

Computation rate
The difference between 5.4%
(0.054) and your assigned
experience rate (0.054 – .XXX
(assigned experience rate) =
computation rate)

Taxable state
unemployment wages at
assigned experience rate

Additional Credit

1.

.

x

.

=

.

2.

.

x

.

=

.

3.

.

x

.

=

.

4.

.

x

.

=

.

5.

.

x

.

=

.

If you need more lines, use another sheet and include those
additional credits in the total.

Total

.
Enter the total on line 3.

4. Subtotal (line 2 + line 3 = line 4)
•
•

If line 4 is equal to or more than line 1, STOP here.

STOP

You’ve completed the worksheet. Leave Form 940, line 10 blank.

If line 4 is less than line 1, continue this worksheet.

5. Credit for paying state unemployment taxes late:
5a. What is your remaining allowable credit? (line 1 – line 4 = line 5a)

5a.

.

5b. How much state unemployment tax did you pay late?

5b.

.

5c. Which is smaller, line 5a or line 5b? Enter the smaller number here.

5c.

.

5d. Your allowable credit for paying state unemployment taxes late (line 5c x 0.900 = line 5d)
6. Your FUTA credit (line 4 + line 5d = line 6)
•
•

If line 6 is equal to or more than line 1, STOP here.

STOP

You’ve completed the worksheet. Leave Form 940, line 10 blank.

If line 6 is less than line 1, continue this worksheet.

7. Your adjustment (line 1 – line 6 = line 7)

Enter line 7 from this worksheet on
Form 940, line 10.

Don't attach this worksheet to your Form 940. Keep it for your records.

Instructions for Form 940 (2016)

­9­

11. If Credit Reduction Applies . . .

Example for using the worksheet:

If you paid FUTA taxable wages that were also subject to state
unemployment taxes in any states that are subject to credit
reduction, enter the total amount from Schedule A (Form 940) on
Form 940, line 11. However, if you entered an amount on line 9
because all the FUTA taxable wages you paid were excluded
from state unemployment tax, skip line 11 and go to line 12.

Employee A and Employee B are corporate officers whose wages are
excluded from state unemployment tax in your state. Employee C's wages
aren't excluded from state unemployment tax. During 2016, you paid
$44,000 to Employee A, $22,000 to Employee B, and $16,000 to
Employee C. Your state's wage base is $8,000. You paid some state
unemployment tax on time, some late, and some remains unpaid.

Part 4: Determine Your FUTA Tax and
Balance Due or Overpayment

Here are the records:
Total taxable FUTA wages (Form 940, line 7)
Taxable state unemployment wages . . . . .
Experience rate for 2016 . . . . . . . . . . . .
State unemployment tax paid on time . . . . .
State unemployment tax paid late . . . . . . .
State unemployment tax not paid . . . . . . .

$21,000.00
$ 8,000.00
0.041 (4.1%)
$100.00
$78.00
$150.00

. . . . . . .
. . . . . . .
. . . . . . .
. . . . . . .
. . . . . . .
. . . . . . .

If any line in Part 4 doesn't apply, leave it blank.

12. Total FUTA Tax After Adjustments

Add the amounts shown on lines 8, 9, 10, and 11, and enter the
result on line 12.
line 8
line 9
line 10
+ line 11

1. Maximum allowable credit
$21,000.00 (Form 940, line 7)
x 0.054 (maximum credit rate)
$1,134.00

1.

$1,134.00

2. Credit for timely state unemployment tax
payments

2.

$100.00

3. Additional credit

3.

$104.00

0.054 (maximum credit rate)
– 0.041 (your experience rate)
0.013 (your computation rate)

line 12

!

$8,000
x
0.013

CAUTION

13. FUTA Tax Deposited for the Year

$104.00

4. Subtotal (line 2 + line 3)

4.

Enter the amount of FUTA tax that you deposited for the year,
including any overpayment that you applied from a prior year.

$204.00

14. Balance Due

$100
+ 104

If line 13 is less than line 12, enter the difference on line 14.

$204
5. Credit for paying state unemployment taxes late
5a.

Remaining allowable credit: (line 1 ­ line 4)

If line 9 is greater than zero, lines 10 and 11 must be
zero because they don't apply.

5a.

line 12
– line 13

$930.00

line 14

$1,134.00
– 204.00
$930.00
5b.

State unemployment tax paid late:

5b.

$78.00

5c.

Which is smaller? Line 5a or line 5b?

5c.

$78.00

5d.

Allowable credit (for paying
late)

5d.

$70.20

If line 14 is:
More than $500, you must deposit your tax. See When Must
You Deposit Your FUTA Tax, earlier.
$500 or less, you can deposit your tax, pay your tax with a
credit card or debit card, pay your tax by EFW if filing
electronically, or pay your tax by check or money order with your
return. For more information on electronic payment options, visit
the IRS website at www.irs.gov/payments.
Less than $1, you don't have to pay it.

6.

$274.20

If you don't deposit as required and pay any balance due
with Form 940, you may be subject to a penalty.

$78.00
x 0.900
$70.20
6. Your FUTA credit (line 4 + line 5d)

!

$204.00
+ 70.20

CAUTION

If you pay by EFT, credit card, or debit card, file your return
using the Without a payment address under Where Do You File.
Don't file Form 940-V, Payment Voucher.

$274.20
7. Your adjustment (line 1 - line 6)

7.

$859.80

What if you can't pay in full? If you can't pay the full amount
of tax you owe, you can apply for an installment agreement
online. You can apply for an installment agreement online if:
You can't pay the full amount shown on line 14,
The total amount you owe is $25,000 or less, and
You can pay the liability in full in 24 months.

$1,134.00
- 274.20
$859.80 You would enter this amount on Form 940,
line 10.

­10­

Instructions for Form 940 (2016)

To apply using the Online Payment Agreement Application,
go to IRS.gov, click on Tools, then click on Online Payment
Agreement.
Under an installment agreement, you can pay what you owe
in monthly installments. There are certain conditions you must
meet to enter into and maintain an installment agreement, such
as paying the liability within 24 months, and making all required
deposits and timely filing tax returns during the length of the
agreement.
If your installment agreement is accepted, you will be charged
a fee and you will be subject to penalties and interest on the
amount of tax not paid by the due date of the return.

In years when there are credit reduction states, you must

TIP include liabilities owed for credit reduction with your

fourth quarter deposit. You may deposit the anticipated
extra liability throughout the year, but it isn't due until the due
date for the deposit for the fourth quarter, and the associated
liability should be recorded as being incurred in the fourth
quarter.

17. Total Tax Liability for the Year

Your total tax liability for the year must equal line 12. Copy the
amount from line 12 onto line 17.

Part 6: May We Speak With Your
Third­Party Designee?

15. Overpayment

If line 13 is more than line 12, enter the difference on line 15.

If you want to allow an employee, your paid tax preparer, or
another person to discuss your Form 940 with the IRS, check the
“Yes” box. Then enter the name and phone number of the
person you choose as your designee. Be sure to give us the
specific name of a person — not the name of the firm that
prepared your tax return.

line 13
– line 12
line 15

Have your designee select a five-digit Personal Identification
Number (PIN) that he or she must use as identification when
talking to the IRS about your form.

If you deposited more than the FUTA tax due for the year, you
may choose to have us either:
Apply the refund to your next return, or
Send you a refund.

By checking “Yes,” you authorize us to talk to your designee
about any questions that we may have while we process your
return. Your authorization applies only to this form, for this year;
it doesn't apply to other forms or other tax years.

Check the appropriate box in line 15 to tell us which option
you select. If you don't check either box, we will automatically
refund your overpayment, less any amount we apply to any past
due tax account shown in our records under your EIN.

You’re authorizing your designee to:
Give us any information that is missing from your return,
Ask us for information about processing your return, and
Respond to certain IRS notices that you have shared with
your designee about math errors and in preparing your return.
We won't send notices to your designee.

If line 15 is less than $1, we will send you a refund or apply it
to your next return only if you ask for it in writing.

Part 5: Report Your FUTA Tax
Liability by Quarter Only if Line 12 is
More Than $500

You’re not authorizing your designee to:
Receive any refund check,
Bind you to anything (including additional tax liability), or
Otherwise represent you before the IRS.

Fill out Part 5 only if line 12 is more than $500. If line 12 is $500
or less, leave Part 5 blank and go to Part 6.

The authorization will automatically expire 1 year after the
due date for filing your Form 940 (regardless of extensions). If
you or your designee want to end the authorization before it
expires, write to the IRS office for your location using the Without
a payment address under Where Do You File.

16. Report the Amount of Your FUTA Tax
Liability for Each Quarter

Enter the amount of your FUTA tax liability for each quarter on
lines 16a–d. Don't enter the amount you deposited. If you had no
liability for a quarter, leave the line blank.

If you want to expand your designee's authorization or if you
want us to send your designee copies of your notices, see Pub.
947.

16a. 1st quarter (January 1 to March 31)
16b. 2nd quarter (April 1 to June 30)
16c. 3rd quarter (July 1 to September 30)
16d. 4th quarter (October 1 to December 31)
To figure your FUTA tax liability for the fourth quarter, complete
Form 940 through line 12. Then copy the amount from line 12
onto line 17. Lastly, subtract the sum of lines 16a through 16c
from line 17 and enter the result on line 16d.

Part 7: Sign Here (Approved Roles)
You MUST Fill Out Both Pages of This Form and
SIGN It

Failure to sign will delay the processing of your return.
On page 2 in Part 7, sign and print your name and title. Then
enter the date and the best daytime telephone number, including
area code, where we can reach you if we have any questions.

Example:
You paid wages on March 28 and your FUTA tax on those wages was $200.
You weren't required to make a deposit for the 1st quarter because your
accumulated FUTA tax was $500 or less. You paid additional wages on June
28 and your FUTA tax on those wages was $400. Because your accumulated
FUTA tax for the 1st and 2nd quarters exceeded $500, you were required to
make a deposit of $600 by July 31.

Who Must Sign Form 940?

The following persons are authorized to sign the return for each
type of business entity.
Sole proprietorship—The individual who owns the
business.
Partnership (including a limited liability company (LLC)
treated as a partnership) or unincorporated organization—
A responsible and duly authorized partner, member, or officer
having knowledge of its affairs.

You would enter $200 in line 16a because your liability for the 1st quarter is
$200. You would also enter $400 in line 16b to show your 2nd quarter liability.

Instructions for Form 940 (2016)

­11­

Corporation (including an LLC treated as a corporation)
—The president, vice president, or other principal officer duly
authorized to sign.
Single­member LLC treated as a disregarded entity for
federal income tax purposes—The owner of the LLC or a
principal officer duly authorized to sign.
Trust or estate—The fiduciary.
Form 940 may also be signed by a duly authorized agent of
the taxpayer if a valid power of attorney or reporting agent
authorization (Form 8655) has been filed.

laws of the United States. We need it to figure and collect the
right amount of tax. Subtitle C, Employment Taxes, of the
Internal Revenue Code imposes unemployment tax under the
Federal Unemployment Tax Act. Form 940 is used to determine
the amount of the taxes that you owe. Section 6011 requires you
to provide the requested information if the tax is applicable to
you. Section 6109 requires you to provide your identification
number. If you fail to provide this information in a timely manner,
or provide false or fraudulent information, you may be subject to
penalties.

Alternative signature method. Corporate officers or duly
authorized agents may sign Form 940 by rubber stamp,
mechanical device, or computer software program. For details
and required documentation, see Rev. Proc. 2005-39, 2005-28
I.R.B. 82, available at www.irs.gov/irb/2005-28_IRB/ar16.html.

You’re not required to provide the information requested on a
form that is subject to the Paperwork Reduction Act unless the
form displays a valid OMB control number. Books or records
relating to a form or instructions must be retained as long as their
contents may become material in the administration of any
Internal Revenue law.

Paid preparers. A paid preparer must sign Form 940 and
provide the information in the Paid Preparer Use Only section of
Part 7 if the preparer was paid to prepare Form 940 and isn't an
employee of the filing entity. Paid preparers must sign paper
returns with a manual signature. The preparer must give you a
copy of the return in addition to the copy to be filed with IRS.
If you’re a paid preparer, enter your Preparer Tax
Identification Number (PTIN) in the space provided. Include your
complete address. If you work for a firm, write the firm's name
and the EIN of the firm. You can apply for a PTIN online or by
filing Form W-12. For more information about applying for a PTIN
online, visit the IRS website at www.irs.gov/ptin. You can't use
your PTIN in place of the EIN of the tax preparation firm.
Generally, don't complete the Paid Preparer Use Only section
if you’re filing the return as a reporting agent and have a valid
Form 8655 on file with the IRS. However, a reporting agent must
complete this section if the reporting agent offered legal advice,
for example, by advising the client on determining whether its
workers are employees or independent contractors for Federal
tax purposes.

Generally, tax returns and return information are confidential,
as required by section 6103. However, section 6103 allows or
requires the IRS to disclose or give the information shown on
your tax return to others as described in the Code. For example,
we may disclose your tax information to the Department of
Justice for civil and criminal litigation, and to cities, states, the
District of Columbia, and U.S. commonwealths and possessions
to administer their tax laws. We may also disclose this
information to other countries under a tax treaty, to federal and
state agencies to enforce federal nontax criminal laws, or to
federal law enforcement and intelligence agencies to combat
terrorism.
If you have comments concerning the accuracy of these time
estimates or suggestions for making these forms simpler, we
would be happy to hear from you. You can send us comments
from www.irs.gov/formspubs. Click on More Information and
then click on Give us feedback. Or you can send your comments
to Internal Revenue Service, Tax Forms and Publications
Division, 1111 Constitution Avenue, NW, IR-6526, Washington,
DC 20224. Don't send Form 940 to this address. Instead, see
Where Do You File, earlier.

Privacy Act and Paperwork Reduction Act Notice We ask
for the information on Form 940 to carry out the Internal Revenue

Estimated average times
The time needed to complete and file this form will vary depending on individual circumstances. The estimated average time is:
Form

Recordkeeping

Preparing, copying, assembling, and sending
the form to the IRS

Schedule A (Form 940)

16 hrs., 1 min.

15 min.

Worksheet (Form 940)

1 hr., 41 min.

21 min.

­12­

Instructions for Form 940 (2016)