The IRS Form 940 is a federal tax form that employers must use to report their annual Federal Unemployment Tax Act (FUTA) tax liability. It is a yearly form that must be filed with the IRS by the end of January. The form is used to determine how much of the employer’s FUTA tax liability should be paid to the federal government. This form is also used to report the employer’s FUTA tax rate, which is the rate the employer pays when an employee is laid off or terminated from employment. The FUTA tax rate is determined by the state in which the employee is employed.
What is the Purpose of Form 940?
The purpose of Form 940 is to help employers determine their FUTA tax liability and to report this amount to the IRS. The form also provides employers with information on how to pay their FUTA tax liability. In addition, the form helps the IRS determine if the employer is eligible to receive a FUTA tax credit, which is a tax break that can be applied to the employer’s federal income tax payments.
When is Form 940 Due?
The IRS Form 940 is due on the last day of January of the following year. This means that the form must be filed for the 2021 tax year by January 31, 2022. Employers who do not file the form on time may be subject to penalties and interest charges.
What Information is Required on Form 940?
When completing Form 940, employers must provide detailed information about their employees, including their Social Security numbers, wages earned, and the amount of FUTA tax they are liable for. Employers must also provide information about their FUTA tax rate and the amount of FUTA credit they are eligible to receive. Additionally, employers must provide information about the type of services their employees provide. This information is used by the IRS to determine the employer’s FUTA tax liability and the amount of FUTA credit they are eligible to receive.
How to File Form 940
Employers can file Form 940 electronically or by mail. Employers who choose to file electronically can do so through the IRS website, or they can use an authorized third-party provider. Employers who choose to file by mail must print out the form and mail it to the IRS. Employers should also keep a copy of the form for their own records.
Penalties for Late Filing of Form 940
Employers who fail to file Form 940 on time may be subject to penalties and interest charges. The amount of the penalty depends on when the form is filed and can range from 5% to 15% of the unpaid tax. Additional penalties may also be imposed if the employer fails to file the form within 60 days of the due date.
Conclusion
The IRS Form 940 is an important form that employers must file each year in order to report their FUTA tax liability. The form must be filed by the end of January of the following year, and employers who fail to file the form on time may be subject to penalties and interest charges. Employers should keep a copy of the form for their own records and use it to determine their FUTA tax liability and the amount of FUTA credit they are eligible to receive.
