Glossary of Human Resources Management and Employee Benefit Terms
IRS Form 940 is an annual report employers must file to pay and report on their federal unemployment taxes. Federal unemployment taxes do not need to be deducted from employee pay, but they must be paid and reported on IRS Form 940. You must file a Form 940 if:
Any employee worked 20 weeks or more over the course of the year.
$1,500 or more was paid to any employee within the standard calendar year.
You normally have employees but didn’t pay them during a specific calendar year.
Unemployment tax due is calculated and compared against the employer’s liability and the tax already paid using IRS Form 940. If you owe unemployment taxes, you must pay them to the IRS.
Any employer with employees must pay unemployment taxes using Form 940. Federal unemployment tax, in tandem with state unemployment tax, is used to compensate unemployed workers who have been laid off through no fault of their own and are actively looking for work.
You can mail your IRS Form 940 directly to the IRS or use an online third-party to file your taxes. Where to mail your IRS Form 940 depends on where your business is located and whether or not you are including a payment with your form. The location for where to mail your IRS Form 940 also depends on the time of year you are filing your return. Check carefully before you send to avoid confusion.
Employers mailing Form 940 without payment for returns must check their location before sending forms. Mailing addresses for IRS Form 940 without payment varies depending on business location and the time of year you are filing. Check the IRS website for updates on where to send your IRS Form 940.
Where to mail your Form 940 with payment depends on the business location and time of year during which you will be filing. Check the IRS website for updates on where to send your IRS Form 940.
Employers can file IRS Form 940 online using a third-party. The IRS provides information on authorized e-file providers employers can choose from to file their business taxes. Employers that file with third-party providers can expect to pay a fee for the filing services.
The deadline for filing IRS Form 940 is January 31 each year for the previous year. This means employers filing taxes for 2018 must have their Form 940 filed by January 31, 2019. If January 31st falls on a weekend, IRS Form 940 is due on the next business day. Employers that have already deposited their Federal Unemployment Taxes have 10 additional days to file.
You can amend an IRS Form 940 from previous years by using the previous year’s form to file your amended return. For example, if you need to amend a return you filed in 2018, you can file an amended return using the form from 2018. Steps to amend your return are included below:
If you filed an electronic Form 940, you will need to use a paper return to amend your return.
On the paper form, make sure you check the amended return box on page 1 of Form 940 on the upper right-hand corner of the page.
Amend the form with the correct amounts.
Include an explanation with your amended form about why you are amending. Send your amended form to the location that falls under the category of “where to send your Form 940 without a payment,” even if you include payment in your amended return.
Employers with adjustments on the amended Form 940 need to also attach Schedule R form.
IRS Form 940 and Form 941 are both used for employer payroll taxes; however, they are used for different types of taxes. Form 940 is used by employers to file annual federal unemployment taxes, while Form 941 is used to report quarterly payroll taxes including Medicare, Social Security, and Federal Income Tax. Both forms are used for reporting employer taxes, and both forms are required by the IRS.
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