Form 940 sounds like just another tax form. But if you’re a business owner, it’s super important to file it every year with the IRS. Specifically, this form reports your FUTA tax payments, which stands for federal unemployment tax act, and is due January 31st each year. Most employers pay both a federal and a state unemployment tax, which provide funds to workers who have lost their jobs.
As an employer, FUTA is all you. It can’t be collected or deducted from your employees’ wages.
If you paid employees wages of $1,500 in any quarter in the past calendar year, or paid them for at least some part of a day in any 20 or more different weeks in the past year, you need to file Form 940. This applies to you even if you sold or transferred your business during the year. Household employers who paid cash wages of $1,000 or more in any calendar quarter in the past year and have other non-household employees also need to file Form 940. (However, if you only have household employees, fill out Schedule H instead.)
Want more information on Form 940? Check out the IRS instruction sheet here.Updated October 13, 2017