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Schedule A Form 940 for 2014 860312 Multi-State Employer and Credit Reduction Information OMB No. 1545-0028 Department of the Treasury Internal Revenue Service See the instructions on page 2. File this schedule with Form 940. Employer identification number EIN Name not your trade name Place an X in the box of EVERY state in which you had to pay state unemployment tax this year. For each state with a credit reduction rate greater than zero enter the FUTA taxable wages multiply by the...
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Who files Schedule A (Form 940)?

An employer must file Form 940 if it

  • paid wages of $1,500 or more to employees in any calendar quarter during 2015 or 2016, or
  • had one or more employees for at least some part of a day in any 20 or more different weeks in 2015 or 20 or more different weeks in 2016. All full-time, part-time, and temporary employees should be counted.

For 2016, there are credit reduction states. If the employer paid any wages that are subject to the unemployment compensation laws of a credit reduction state, its credit against federal unemployment tax will be reduced based on the credit reduction rate for that credit reduction state. The employer uses Schedule A (Form 940) to figure the credit reduction.

If the employer is a multi-state employer, it must check the box on line 1b of Form 940, fill out Schedule A and attach it to your Form 940.

What is the Purpose of Schedule A (Form 940)?

Employers use Form 940 for the purpose of reporting the annual Federal Unemployment Tax Act (FUTA) tax. Together with state unemployment tax systems, the FUTA tax provides funds for paying unemployment compensation to workers who have lost their jobs. Most employers pay both a federal and a state unemployment tax. Only employers pay FUTA tax. Don't collect or deduct FUTA tax from your employees' wages.

The FUTA tax applies to the first $7,000 paid to each employee during a calendar year after subtracting any payments exempt from FUTA tax.

When is Schedule A Due?

The due date for filing Form 940 for 2016 including Schedule A is January 31st, 2017. If you deposited all your FUTA tax when it was due, you may file Form 940 until February 10th, 2017.

How do I Fill out Schedule A?

Step 1. Place an “X” in the box of every state where you had to pay state unemployment taxes this year, even if the state's credit reduction rate is zero.

Step 2. In the FUTA Taxable Wages box, enter the total FUTA taxable wages that you paid in that state. (The FUTA wage base for all states is $7,000.) Do not include in the FUTA Taxable Wages box wages that were excluded from state unemployment tax.

Step 3. To calculate the total credit reduction, add up all of the Credit Reduction boxes and enter the amount in the Total Credit Reduction box. Finally, enter the total credit reduction on Form 940, line 11.

Where do I Send Schedule A?

The IRS Instructions for Form 940 contain addresses where you can send Form 940 and Schedule A attached to it. You can find the instructions at https://www.irs.gov/pub/irs-pdf/i940.pdf

Hi welcome to easy payroll guide my name is Karen Hutchinson and in this video we're going to be completing the IRS form 940 this is the federal unemployment tax that is owed at the end of each year it's also known as FTA which is the federal unemployment tax act we are going to complete the IRS 940 using a fictitious example this example kind of piggybacks off of the example that I did in my earlier video at the beginning of this page as we were calculating the food a liability we have three employees in this business and the employees are all paid wages that are taxable for food a' employee an is a resident of Maryland and has been paid a total wage of $16,000 employee B is a resident of Maryland as well and has been paid wages of $13,000 an employee's C is a resident of Delaware and has been paid total wages of $8,000 this is a total of 37 thousand dollars paid and wages I wanted to give you an example of a multi-state 940 as well, so that's why I have one employee here who is a resident of Delaware, so this means that the employer would be playing state unemployment taxes to Maryland and to Delaware for its respective employees so what this means is that I owe as the employer food or wages on the first twenty-one thousand dollars because each of my employees have met the minimum requirement of or the maximum requirement of seven thousand, so FDA is paid on the first seven thousand dollars in wages for each employee since they all made over seven thousand dollars I'm responsible for paying the full amount of food a wage for each employee, so that's twenty-one thousand dollars seven thousand times three employees I have excess wages of sixteen thousand dollars if I take my total wages thirty-seven thousand and subtract my food Oh ages which is 21 thousand you'll see that I've paid excess wages of sixteen thousand these are the amount of wages that are not subject to food attacks because they these are the wages that are over the seven thousand dollar threshold for each employee, so we're going to use this information to complete the IRS form 940 now the beginning of the 940 the top portion is your business information you would complete this with all the information for your particular business, and you won't really probably need to check anything in this box unless you're amending, or you're completing closing your business and this is your final 940 if you did not make any payments to employees, and you still need to file this return, and you'll want to check box C, so we're going to start with Part one and Part one says that if you had to pay state unemployment tax in only one state then you would enter the state abbreviation and 1a so if all of my employees were from Maryland then I would enter MD for Maryland's here but since I have an employee from Delaware I am considered a multi-state employer, so that means that for line B I'm going to check the box because I'm a multi-state employer which means that I've employed employees from more...
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