Schedule A Released for Form 940
On November 23, the IRS released Schedule A for Form 940, or the Employer’s Annual Federal Unemployment (FUTA) Tax Return. Although the 2012 Form 940 has not been released yet, it is important to become familiar with the schedule if you have to report additional taxes because of federal unemployment tax credit reductions.
Filing Requirements for Form 940
Form 940 is filled out annually by employers who are covered by the Federal Unemployment Tax Act to report FUTA taxes owed. Unlike Form 941, Form 940 is only filed annually and not on a quarterly basis. The form must be filed by January 31 of the calendar year following the return year.
However, employers must keep up with their FUTA tax liability on a quarterly basis. This means, if an employers quarterly FUTA tax liability is greater than $500, they must deposit the amount before the last day of the month following the quarter.
If by the end of the year, the FUTA tax liability has not reached a total of $500, the employer has two options. They can send the amount with Form 940 to the IRS or use the Electronic Federal Tax Payment System (EFTPS) to file the amount. For all amounts greater than $500, the employer must file using EFTPS. Criminal penalties can be imposed if the employer does not file Form 940 on time.
Compare to the 2011 Form 940 and Schedule A.