Form 940

Understanding IRS Form 940: A Comprehensive Guide to Annual Federal Unemployment Taxes

Overview of Form 940
IRS Form 940 serves as the essential annual report that employers must submit to fulfill their obligations concerning federal unemployment taxes. This form not only facilitates the payment of these taxes but also provides a platform for reporting on them. Despite not being deducted from employee pay, federal unemployment taxes are crucially mandated to be paid and reported using IRS Form 940.

Filing Criteria for Form 940
Employers are required to file Form 940 under the following circumstances:

1. Any employee worked for 20 weeks or more throughout the year.
2. $1,500 or more was paid to any employee within the standard calendar year.
3. You have employees but did not remunerate them during a specific calendar year.

The calculation and comparison of unemployment taxes owed against the employer’s liability and the taxes already paid are conducted using IRS Form 940. If there is a liability, employers must promptly settle the owed unemployment taxes with the IRS.

Who Needs to File Form 940?
Every employer with employees is obligated to pay unemployment taxes using Form 940. This federal unemployment tax, in conjunction with state unemployment tax, serves to compensate workers who, through no fault of their own, have been laid off and are actively seeking employment.

Mailing Instructions for Form 940
The submission of IRS Form 940 can be done either by mailing it directly to the IRS or by utilizing an online third-party service. The mailing address depends on the business’s location, the inclusion of payment, and the time of year for filing. It is imperative to verify the correct mailing address to avoid any complications.

Mailing Form 940 Without Payment
For employers sending Form 940 without payment, the mailing address varies based on the business location and the filing time. Regularly check the IRS website for updates on the appropriate mailing address.

Mailing Form 940 with Payment
The mailing address for Form 940 with payment is contingent on the business location and filing time. Stay informed about the correct mailing address by checking updates on the IRS website.

Online Filing of Form 940
Employers have the option to file IRS Form 940 online through authorized third-party providers. However, this convenience comes with a filing service fee. The IRS provides a list of authorized e-file providers to assist employers in choosing a suitable service for filing their business taxes.

Deadline for Filing Form 940
The deadline for filing IRS Form 940 is January 31 of each year for the previous year. If January 31st falls on a weekend, the form is due on the next business day. Employers who have already deposited their Federal Unemployment Taxes have an additional 10 days to file.

Amending Form 940
To amend IRS Form 940 from previous years, employers must use the form from the corresponding year. If the original filing was electronic, a paper return must be used for the amendment. The amended form should be sent to the location specified for forms without payment, even if payment is included. Employers with adjustments must also attach Schedule R form.

Distinguishing Form 940 and Form 941
While both Form 940 and Form 941 are vital for employer payroll taxes, they serve different purposes. Form 940 is utilized for the annual filing of federal unemployment taxes, whereas Form 941 is employed for reporting quarterly payroll taxes, including Medicare, Social Security, and Federal Income Tax. Both forms are obligatory for reporting employer taxes as mandated by the IRS.