What is Form 940?
Form 940 reports federal unemployment (FUTA) tax, which funds unemployment benefits. It's filed annually and is paid entirely by the employer — not withheld from employees.
The 940 handles federal unemployment (FUTA) tax, filed once a year and paid entirely by the employer — never withheld from workers. The headline FUTA rate is 6.0% on the first $7,000 of each employee's wages, but paying your state unemployment tax on time earns a credit that usually drops the effective rate to 0.6%.
Who files it
Employers who paid $1,500+ in wages in a quarter or had employees for part of 20+ weeks.
When it's due
Form 940 is generally due January 31. Deadlines can move for weekends and holidays, so confirm the exact date for the current year on IRS.gov.
Key lines and parts
Here's what you'll actually fill in on Form 940:
- Total payments to employees
- Payments exempt from FUTA
- FUTA tax before and after state credit
- Balance due or overpayment
How to file
File by January 31 for the prior year. Most employers get a credit for state unemployment tax paid, lowering the effective FUTA rate.