| Instructions for Form 940 |
2006 Tax Year |
Instructions for Form 940 - Introductory Material
This is archived information that pertains only to the 2006 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
No credit reduction states.
The U.S. Department of Labor (DOL) has announced that there are no credit reduction states for tax year 2006. The
lines for credit reduction
entries have been shaded out on the 2006 Form 940 and on Part 2 of the 2006 Schedule A (Form 940).
We've revised the form and instructions.
You may notice a number of changes in Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. We revised
the form and instructions so
they are easier for you to read and fill out. At the same time, the new design makes the form easier and faster for us to
process. Now we can
optically scan Form 940 and will capture data more accurately and efficiently than before. Please read both the form and instructions
carefully to
become familiar with the changes.
The redesigned Form 940 replaces previous versions of both Form 940-EZ and Form 940.
We have replaced two forms with one simplified form that should make preparing your tax return easier. If you filed
Form 940-EZ before, you must
now use the redesigned Form 940.
A new schedule was developed for multi-state employers and employers in states that are subject to credit reduction.
In addition to the changes on the Form 940, we developed Schedule A (Form 940), Multi-State Employer and Credit Reduction
Information. You must use
Schedule A (Form 940) if you paid wages to employees in more than one state or if you paid wages in any state that is subject
to credit reduction (if
any). However, for 2006 we shaded out the credit reduction part of Schedule A (Form 940) because there are no credit reduction
states for 2006.
We've also developed a new worksheet for you to use if some of the wages you paid were excluded from state unemployment tax
or if you paid any state unemployment tax late.
On page 8, you'll find an easier, all-inclusive worksheet that you can use to compute the adjustment if you paid any
state unemployment tax late.
You also use this worksheet to figure the adjustment for additional FUTA tax if your state does not require you to pay state
unemployment tax on all
your employees, for example, if wages paid to your corporate officers are excluded from state unemployment tax.
We've added a listing of contact information for state unemployment agencies.
You must contact your state unemployment agency to receive your state reporting number, state experience rate, and
details about your state
unemployment tax obligations. The list, located on page 12, contains the name of each state, telephone number(s), and web
address. For the most
up-to-date information, visit the Department of Labor's website at
www.workforcesecurity.doleta.gov.
You are no longer required to list your state reporting number(s) on Form 940.
When you registered as an employer with your state, the state assigned you a state reporting number. We are not asking
for the state reporting
numbers on the redesigned Form 940, because the states will provide the state reporting numbers to the IRS.
You can file and pay electronically.
Using electronic options available from the Internal Revenue Service (IRS) can make filing a return and paying your
federal tax easier. You can use
IRS e-file to file a return and Electronic Federal Tax Payment System (EFTPS) to make deposits or pay in full whether you rely on a
tax
professional or prepare your own taxes.
-
For IRS e-file, visit
www.irs.gov for additional information.
-
For EFTPS, visit
www.eftps.gov or call EFTPS Customer Service at 1-800-555-4477.
You can pay your balance due by credit card.
You may pay your FUTA tax shown on line 14 using a major credit card. Contact Official Payments Corporation at 1-800-272-9829,
or visit
www.officialpayments.com to make your payment by credit card.
You may also contact Link2Gov Corporation at 1-888-729-1040, or visit their website at
www.pay1040.com. However, do not use a credit card to pay taxes that are required to be deposited.
(See When Must You Deposit Your FUTA Tax? on page 3.) For more information on paying your taxes with a credit card, see Pub. 15 (Circular
E), Employer's Tax Guide, or visit the IRS website at
www.irs.gov and type “ e-pay” in the search box.
Photographs of missing children.
IRS is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children
selected by the Center may
appear in instructions on pages that would otherwise be blank. You can help bring these children home by looking at the photographs
and calling
1-800-THE-LOST (1-800-843-5678) if you recognize a child.
How Can You Get More Help?
If you want more information about this form, see Pub. 15 (Circular E), visit our website at
www.irs.gov, or call 1-800-829-4933.
For a list of related employment tax topics, visit the IRS website at
www.irs.gov and click on the “Businesses” tab.
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