As an employer, you may have to file a federal unemployment tax return,
Form 940 or
Form 940-EZ,
after the close of the year. Refer to Topic 760
for filing information. If you are required to file Form 940 or Form 940-EZ,
it generally is due by January 31st each year. However, you may have to
make deposits of this tax quarterly before you file the return.
Only the first $7,000 paid to each employee during each calendar year is
used to figure the tax. To determine if you owe a deposit of federal unemployment
tax at the end of each calendar quarter, first figure the amount of wages you
paid during the quarter that are subject to both federal and state unemployment tax.
Next, multiply the taxable wages you have just figured by eight tenths of one percent,
that is, .008. Please note: If any part of the amounts paid are exempt from
state unemployment tax, a higher rate may be required. If the amount due is
$100 or less, you do not have to make a deposit. Add this amount to the tax
you figure for wages subject to unemployment tax at the end of the next quarter.
If the amount you get is more than $100, a deposit is due.
If a deposit is due, you must make it by the last day of the month following
the end of the quarter. For example: if your tax at the end of the first quarter,
March 3lst, is $60, you do not have to make a deposit. If your tax for the second
quarter, which ends on June 30th, is $70, your total liability through the end
of June is now $130. You must deposit $130 by July 31st.
When making quarterly deposits take federal tax deposit coupons,
Form 8109, with the payment to an authorized financial institution or Federal Reserve
bank to make deposits. Be sure the
coupon shows the correct employer identification
number, name, type of tax, and tax year. The authorized financial institution or
Federal Reserve bank cannot accept payment without a deposit coupon. To see if you
must deposit federal unemployment tax for the last quarter of the year, subtract the
amounts previously deposited for the year from the tax reportable on Form 940 or
Form 940-EZ. If the result is more than $100, deposit it by January 31st.
If it is $100 or less, you may either deposit it by January 31st or pay it with your
Form 940 or Form 940-EZ. If you pay it with Form 940 or Form 940-EZ, you must use the
payment voucher at the bottom of the return. Where you file the form depends on whether
or not you are including a payment.
Get the Instructions for Form 940
(or 940-EZ) to see if you must
make your deposits using the Electronic Federal Tax Payment System (EFTPS).
When you fill out Form 940 or Form 940-EZ, you must complete the Record of Quarterly Federal
Unemployment Tax Liability if your total tax is over $100. This part of the
form shows the IRS whether you deposited your tax on time. Refer to
Publication 15,
Employer's Tax Guide, for Late Deposit Penalties and
Publication 566, Electronic Federal Tax Payment System. Publications can be
downloaded from this site,
or ordered by calling 1-800-829-3676.
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