1. Employers must file Form 940 if they paid wages of $1,500 or more in any calendar quarter during the current or previous year, or if they had one or more employees for at least some part of a day in any 20 or more different weeks in the current or previous year.
2. We will collect the required information, including your employer identification number (EIN), total wages paid to employees, any exempt wages, and any FUTA tax already paid and will calculate your FUTA tax liability based on the instructions provided with Form 940. The tax rate is 6% on the first $7,000 of each employee's wages, but you may be eligible for a credit of up to 5.4% if you paid state unemployment taxes on time.
3. Fill out the Form 940 accurately and completely, providing the requested information, including your business details, wages paid, and any FUTA tax owed or already paid.
4. There are two options for filing Form 940. We can either mail it to the appropriate IRS address or file it electronically using the IRS e-file system. Electronic filing is generally faster and more convenient.
5. If you owe FUTA tax, then make sure to pay it by the due date. You can pay electronically using the Electronic Federal Tax Payment System (EFTPS), by credit or debit card, or by check or money order. If your FUTA tax obligation exceeds $500 for the entire year, then you are required to make at least one quarterly payment. However, if your FUTA tax liability is $500 or less in a particular quarter, then you can carry it over to the following quarter.