Tax Form 940 Instructions

What is a Federal Unemployment Insurance Tax Form?

Employers must withhold federal income tax from their employees’ wages. You also withhold part of Social Security and Medicare taxes from their wages and you pay a matching amount to yourself.

Federal Unemployment Tax

The Federal Unemployment Tax Act (FUTA) is separate from federal income tax, Social Security and Medicare taxes. Employers report this tax by filing an annual  tax Form 940 with the Internal Revenue Service. Sometimes the employer is required to make quarterly payments during the tax year.

Calculating Tax Amount

FUTA puts a 6.2% tax on the employer for the first $7,000 of gross earnings of each worker per year. Once the $7,000 amount is reached then, the employer no longer pays any Federal unemployment tax for that year concerning that particular worker. There are some credits that are allowed with respect to state unemployment taxes paid that may reduce the effective rate to 0.8%.

Employers Must Pay If:

• You employed one or more individuals who worked at least 20 calendar weeks (doesn’t have to be consecutive) during the current or preceding tax year or
• Paid at least $1,500 in employee wages during any quarter.

Employer Pays

Only the employer pays the federal unemployment tax. This tax is not paid by the employee or taken out of the employees’ pay. For more information, refer to the instructions for tax FORM 940. This is a PDF (portable document file).

Tax Form 940

You will want to consult Tax Form 940 for certain employment situations like:

• Household Employees
• Agricultural Farm Workers
• Services Rendered to Indian Tribal Government
• Tax-Exempt Organizations
• State and Local Government Employees

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State Income Tax Forms For State Tax Filing

Every year we must file our federal and our state taxes. You will only have to file one federal tax return but depending on what states you have worked or lived in, you may have to file more than one state tax return.

Employees - If you have just worked in one state you will only need to file a state tax return for that state, but if you have moved or worked in another state, then you must also file a tax return in that state as well.

Property Owners - You may also need to file another separate state tax return if you have some type of income property in another state. It is very important to do some research on the rules of the state that you have either lived or worked in as different rules apply to income property and the amount of income earned from that property.

Students - If you are currently a college student living in a separate state from your parents be sure to find out if they are still claiming you on their taxes. If they are still claiming you as one of their dependents you will be classified as a resident of your parent?s home state.

Every state has different tax forms that you must complete before the tax deadline. There are many different software programs such as TurboTax that offer all of the necessary state tax forms you may need to file a return for the states you have worked or resided in. Each state has different taxes and different names for each of these so it is very important to find the right state tax forms that you need to fill out.

If you have lived, worked, or earned income in any state, please visit TurboTax Online to find all of the necessary state tax forms. TurboTax online offers free tax calculators and can help you figure your estimated tax return.

TurboTax has tax forms for all States;

Alabama AL, Alaska AK, Arizona AZ, Arkansas AR, California CA, Colorado CO, Connecticut CT, Delaware DE, District of Columbia DC, Florida FL, Georgia GA, Hawaii H, Idaho ID, Illinois IL, Indiana IN, Iowa IA, Kansas KS, Kentucky KY, Louisiana LA, Maine ME, Maryland MD, Massachusetts MA, Michigan MI, Minnesota MN, Mississippi MS, Missouri MO, Montana MT. Nebraska NE, Nevada NV, New Hampshire NH, New Jersey NJ, New Mexico NM, New York NY, North Carolina NC, North Dakota ND, Ohio OH, Oklahoma OK, Oregon OR, Pennsylvania PA, Rhode Island RI, South Carolina, South Dakota, Tennessee TN, Texas TX, Utah UT, Vermont VT, Virginia VA, Washington WA, West Virginia WV, Wisconsin WI, and Wyoming WY