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2022 IRS 940 AR: What You Should Know
The total tax paid by all wages paid will equal total benefits paid (including credits) paid out. Total wages paid on or before June 30, 2018, minus total federal unemployment tax that was withheld and paid on or before June 30, 2018. If you do not have withholding allowances applied, report the entire credit reduction as wages paid. If you have not computed credit reductions, you must enter a nonzero “0” for total wages paid. Example of the credit reduction based on the schedules for California: California withholds and pays federal unemployment tax. The tax is withheld on the wages reported on Form W-2. In connection with the federal unemployment tax, California has a credit reduction. The credit reduction is the portion of the federal unemployment tax (0.75) that is not taken back at the end of the year. So for 2018, the federal unemployment tax credit reduction in California is 10%, or 150. The credit reduction is also reduced by the amount of any credit reduction claimed by the employee. Employer's annual Federal Unemployment Tax Act (FTA) tax return that will be sent to the IRS for each filing period. You pay federal unemployment tax and California and other state unemployment tax on wages earned on or after June 30, 2018, in accordance with the requirements of section 613 of the Internal Revenue Code of 1986, as amended. Form 940, Employer's Annual Federal Unemployment Tax Act (FTA) Tax Return, A complete return that must be filed with the IRS each year. The information reported on your unemployment tax returns determines how you'll allocate unemployment tax relief on your federal tax forms. Employers calculate the credit reduction for 2025 using this schedule. Form 940, Employer's Annual Federal Unemployment Tax Act (FTA) The Form 940 is used by many employers to pay taxes on wages. Form 940 — IRS July 11, 2025 — This is an early release draft of an IRS tax form, instructions, or publication, which the IRS is providing for your informational purposes only. Forms are not available for download at this time. See Form 940 — IRS and Form 940e, Employer's Annual Federal Unemployment Tax Act (FTA) Tax Return. About Form 940, Employer Annual Federal Unemployment Use Form 940 to report your annual Federal Unemployment Tax Act (FTA) tax.
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