To fill out Form 940 for 2022, you need to have the following in documents on hand:
- Your payroll record for 2022
- Download Form 940 for 2022
- Download the IRS Instructions for from 940.
You can access the links to IRS Form 940 for 2022 and its instructions here.
Payroll record
If you don’t use a payroll software, you could use a payroll spreadsheet to track your payroll. You could design it or you could download a copy for free at ninasoap.com under free downloads. There are few you can choose from. You could customize your copy to fit your business needs. You could find free payroll spreadsheet here.
Your payroll spreadsheet should track payroll for each employee by month as well as the cumulative payroll for each employee for FUTA purposes.
Your payroll worksheet should also calculate FUTA on each employee payroll for you to know when your business pays FUTA tax on the first $7,000 you paid an employee.
Because you are required to make tax deposit to IRS when your FUTA liability is more than $500 a quarter, you want to be able to determine the FUTA liability for each month and for each quarter to know when you need to make a tax liability or not. Otherwise, you could also set a routine for yourself to make FUTA tax deposit every quarter even if your tax liability for a quarter is less than $500.
How to make FUTA deposits?
Make FUTA tax deposits by EFT (Electronic Funds Transfer) using EFTPS system.
How to make FUTA tax payment?
When filling Form 940 electronically using a tax software, you could make FUTA tax payment using EFW (Electronic Funds Withdrawal).
Don’t use EFW to make FUTA tax deposit.
You can pay FUTA tax by check or money order with Form 940 when you file paper return and your FUTA tax due is $500 or less.
Is FUTA paid by employer or employee?
FUTA Federal Unemployment Tax is paid by the employer.
What amount do you pay FUTA on?
The employer pays FUTA on the first $7,000 you paid in wages to each employee after you withdraw payment that are exempt from FUTA tax.
Who is required to file FUTA?
If you have paid at least $1,500 or more to any employee any quarter in 2021 or 2022, you are required to pay FUTA.
If you employed one or more employees a part of a day in any 20 weeks during 2021 or 2022 regardless of whether it is a temporally employee, part time employee, or full-time employee, your business is required to paid FUTA. If you are LLC or partnership, don’t count partners as employees.
If Form 940 is one tax return requirement listed on your EIN letter received from IRS after you applied for EIN for your business, you are required to file Form 940 even if you paid $0 wages.
Form 940 due date
Form 940 is due by January 31st.
Where do you mail Form 940?
On IRS Instruction for Form 940 for 2022, page 4 you would locate the IRS addresses.
If you will mail Form 940 with payment,
- Locate your state in the address column.
- Locate the address in “with a payment” column that is on the same row as your state.
- That is the address to mail your Form 940 with payment.
If you will mail Form 940 without payment,
- Locate your state in the address column.
- Locate the address in “without a payment” column that is on the same row as your state.
- That is the address to mail Form 940 if you made FUTA deposits and will not add payment to Form 940 or you have paid no wages and therefore owe $0 FUTA tax.
Is FUTA paid quarterly or annually?
FUTA tax is paid annually or deposited quarterly. If FUTA is more than $500 during a quarter, you are required to make FUTA deposit for that quarter. If your FUTA tax is less than $500 for a quarter, you don’t need to deposit it. You carry it to the next quarter until the cumulative exceeds $500 for a quarter and you deposit the full amount.
If your FUTA in quarter 4 is more than $500, you are required to deposit it by the end of January.
If your FUTA tax in quarter 4 is less than $500, you can deposit it or make payment with your form 940.
Form 940 is filed once a year. FUTA payment is made once a year with FUTA form 940 if the payment is less than $500. FUTA tax is deposited quarterly when the amount is more than $500 for the quarter.
FUTA tax rate for 2022
FUTA tax is 6%.
If you paid FUTA tax to your state, you could get a credit on FUTA to pay to IRS up to 5.4%.
Your business pays 6% on the first $7,000 wages paid to each employee during the year after you exclude payments not subject to FUTA from the wages. Every quarter, determine the portion of the first $7,000 paid to each employee during that quarter to pay FUTA tax on it. Once you paid FUTA tax on the $7,000 wages for an employee, you don’t continue paying FUTA tax on that employee for that year.
How to fill out Form 940 for 2022?
When a line is $0, leave it blank. Don’t enter 0.
You can round totals to the nearest dollar or show the cents.
Business information
Enter your business EIN on EIN line.
Name: Enter your business legal name. That is the business name you entered on the business EIN application form Line business legal name.
If you are a sole proprietor, that will be your fist and last name.
Trade name: If your business has a DBA name you filed with your state, you entered that name as Trade name.
Address: Enter your business address including street number and name, city, state, and zip code.
How to fill out Form 940 if you paid no wages or have no employee in 2022
There is a box at the right “Type of Return”.
Check box “c” no payments to employees in 2022.
You fill out form 940 with your business name and EIN on page 1 and top of page 2. Lines where amounts to be entered, leave them blank.
When you are done, review and print the form 940 out. Sign and date. Make a copy for your business record.
Mail the Form 940 to the IRS address on page 4 of IRS Instructions for Form 940 for 2022 column “without Payment” that corresponds to your state.
How to fill out form 940?
Form 940 Part 1
Line 1a: Enter your state abbreviation.
Line 1b: check the box if it applies to you otherwise, leave it blank.
Line 2: check the box if it applies to you otherwise, leave it blank.
Form 940 Part 2
Line 3: Total payments to all employees: Enter the total wages paid to your employees. On line 3 you will include fringe benefits…
Line 4: Payments exempt from FUTA: On line 4 check boxes for payments on line 3 that are exempt from FUTA. Enter the total amount exempt from FUTA.
Line 5: Enter the total payments made to all employees in excess of the first $7,000 you paid them. This amount should be included on line 3 as well.
Line 6: it is the total amount you should not paid FUTA tax on. That is the total of line 4 payment exempt from FUTA and line 5 payment paid in excess of $7,000.
Line 7: Subtract line 6 from line 3. That is the amount to pay FUTA tax on.
Line 8: Multiply the amount subject to FUTA by 0.6%.
Form 940 Part 3
Line 9: If you are not going to pay unemployment tax to your state, multiply line 7 total taxable FUTA wages by 5.4%. Some states don’t require unemployment tax from S corporation officers (owners).
If Line 10 or Line 11 apply to you, complete them. Otherwise, leave them blank.
Form 940 Part 4
Line 12: Total FUTA: add line 8, line 9, line 10, and line 11.
Line 13: Enter the FUTA tax deposited during the year. Also, if you requested prior year refund to be applied to the next tax return, add it.
Line 14: Balance due: It is the difference between line 12 total FUTA tax and line 13 total deposits. If the total deposited is less than the total tax, you owe FUTA tax. You can pay the FUTA tax liability with the form 940 if it is $500 or less. If it is more than $500. You must make a deposit.
Line 15: If the total deposited is more than the total tax, you have a refund.
Form 940 Page 2
Enter your business legal name that you have on page 1 at the top of page 2. Enter your business EIN number on page 2.
Form 940 Part 5
If your total FUTA tax on Line 12 is more than $500, you complete Line 16 to Line 17. If your Line 12 is $500 or less, leave Line 16 to Line 17 blank and go the next part.
Line 16a to Line 17: If your FUTA tax on line 12 is more than $500, you need to enter in Box 16 a to 16d for FUTA for each quarter regardless of whether or not you made deposits during the year.
Line 17 is the total of Line 16 a to line 16 d. Line 17 should match Line 12.
It is a good idea to tailor your payroll workbook to record and track your payroll by month and calculate total payroll by quarter as well as FUTA tax for each month and each quarter especially if your total annual FUTA will be more than $500.
Form 940 Part 6
You can check “No” if you prefer IRS addresses any questions, they may have with you only.
Form 940 Part 7
Add your name, your business title, and your phone number.
Alternative electronic signature
https://www.irs.gov/irb/2005-28_IRB#RP-2005-39
Leave the Paid Preparer Use Only section alone if you are filling Form 940 for your own business.
If you are not going to add payment to Form 940, you are done completing form 940. You don’t need to fill out Form 940 V.
Print Form 940 out.
Review it and sign and date.
Make a copy of the signed Form 940 and keep for your business record.
Put the signed Form 940 in an envelope and seal.
Look in IRS instructions for Form 940 for 2022 page 4 for the right address to use.
Where to mail Form 940 without a payment?
- Locate your state in the address column.
- Locate the address in “without a payment” column that is on the same row as your state.
- That is the address to write on the envelope.
Without Payment address that corresponds to the row where your state is listed is the address to mail Form 940 if you made FUTA deposits and will not add payment to Form 940 or if you have paid no wages during the year and therefore owe $0 FUTA tax.
Mail your Form 940 via USPS with a tracking number.
Keep the receipt with your Form 940 in your business record.
Form 940 V
If your FUTA tax on Line 14 Balance Due is $500 or less, you can make deposits via EFT (Electronic Funds Transfer) using EFTPS System or you could pay it with the Form 940.
If you decide to pay your balance due with Form 940, you must fill out Form 940V.
Form 940 V Line 1
Enter your business EIN.
Form 940 V Line 2
Enter your balance due from Form 940 Line 14.
Form 940 V Line 3
Enter your business Legal name and address as on Form 940 Page 1.
Review Form 940 V and print it out.
How to write a Payment for Form 940?
You can use money order or your business check. When you pay by check, when the payment is out of your bank account you have another proof IRS received your Form 940. Plus you have more space on the check to write on it compared to a money order.
Make the check or money order payable to: United State Treasury”.
Write the balance due you have on Form 940 V.
Write your business EIN number on it.
Write in the memo area: Form 940 for 2022.
Sign the check.
Review the check and make a copy of the check and the Form 940 V to keep for your business record along with Form 940.
You can fold the Form 940V full sheet of paper and add the check in one of the folds. Then add both Form 940 V and the check in a smaller envelope and write Form 940 V and check payment on the envelope.
Then you put that smaller envelope in a bigger envelope where you put your Form 940.
Then you seal the big envelope. That is how I do it so that I don’t have loose papers moving around in the bigger envelope.
Do not staple Form 940V to anything in the envelope. Do not staple the check to anything in the envelope. You should have Form 940, Form 940 V, and check payment in the envelope to mail to IRS.
Where do you mail Form 940 with Payment?
On IRS Instruction for Form 940 for 2022, page 4 you would locate the IRS addresses.
- Locate your state in the address column.
- Locate the address in “with a payment” column that is on the same row as your state.
- That is the address to mail your Form 940, Form 940 V and the payment check or money order.
Mail your Form 940 with form 940V and payment via USPS with a tracking number. Keep the receipt with your Form 940 in your business record.
You can access the link to IRS Form 940 for 2022 and its instructions here.
Conclusion: How to Fill out IRS Form 940 for 2022 Employer’s Annual Federal Unemployment Tax Return FUTA
The video and article demonstrate step by step how to complete Form 940, Form 940 V, and payment for 2022 and the right address to mail your Form 940.
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