Form 940: Employer's Annual Federal Unemployment (FUTA) Tax Return
Published November 7, 2026
Form 940 is the annual federal return for the Federal Unemployment Tax Act (FUTA) tax. Employers use it to report federal unemployment tax on wages paid during the calendar year. State unemployment programs are separate. This form covers only the federal part.
This post follows the 2025 edition of Form 940 and its instructions, the edition the IRS publishes for the 2025 calendar year. The instructions say more detail on 2026 changes will appear in the 2026 instructions. Check IRS.gov for the edition that matches the year you file.
Who must file
For the 2025 return, the instructions ask two questions. Did you pay wages of $1,500 or more in any calendar quarter of 2024 or 2025? Did you have one or more employees on at least some part of a day in 20 or more different weeks in 2024 or in 2025? If you answered yes to either question, you must file Form 940.
Some rules are different. The instructions say services rendered by employees of a state, or a political subdivision of a state, are exempt from FUTA tax, and no Form 940 is required for them. When you count employees, the instructions say to count full-time, part-time, and temporary workers, but not the partners of a partnership.
How FUTA tax is figured
- FUTA tax is 6.0% of the first $7,000 paid to each employee during the calendar year, after you subtract payments that are exempt from FUTA tax.
- Most employers receive a credit of up to 5.4% against that tax, which is the amount they paid on time to their state unemployment programs. When that credit applies, the net federal rate is 0.6%.
- In a credit reduction state, the credit is smaller. Schedule A (Form 940) figures the credit reduction, and the instructions say to include the amount with your fourth quarter deposit.
When to deposit
Form 940 covers the whole calendar year, but you may have to deposit FUTA tax during the year. If your FUTA tax is more than $500 for the year, you must deposit at least one quarterly payment. If the tax for a quarter is $500 or less, you carry it over to the next quarter until the total is more than $500.
- Undeposited FUTA tax over $500 on March 31: deposit by April 30.
- On June 30: deposit by July 31.
- On September 30: deposit by October 31.
- On December 31: deposit by January 31.
The instructions say you must use EFT for all federal tax deposits.
When to file
For the 2025 return, Form 940 was due February 2, 2026. If you deposited all of your FUTA tax when it was due, the instructions allow you to file by February 10, 2026. A postmark on or before the due date counts as timely. A due date that falls on a weekend or legal holiday moves to the next business day.
The $7,000 limit applies to each employee separately. A worker who reaches the limit early in the year adds no more FUTA tax for the rest of that year.
Special cases
If you made no payments to employees in 2025, the instructions say to check box c in the top right corner of the form, go to Part 7, sign the form, and file it. If your business has closed, or you stopped paying wages, check box d instead. The instructions also cover successor employers, who may include wages paid by a predecessor employer.
Related returns
Wages and income tax withholding go on Form 941: Employer's Quarterly Federal Tax Return. The 941 and 940 work together, but they cover different taxes and different periods. For a late-filing question, see What Happens If I File Late or Can't Pay What I Owe?.
Sources: Sources: IRS, Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return (2025) (https://www.irs.gov/pub/irs-pdf/f940.pdf); Instructions for Form 940 (2025) (https://www.irs.gov/pub/irs-pdf/i940.pdf) This is general information, not advice about your specific return.
More guides on: Tax forms and income reporting
