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Form 940 reports an employer’s annual federal unemployment tax. Open the 2025 IRS PDF.
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Annual employer return
Open the federal return for the wages year. Check state unemployment coverage where the services were performed and the year-specific rules on exemptions, adjustments and deposits.
Schedule A for more than one unemployment-tax jurisdiction
Attach Schedule A when required to pay state unemployment tax in more than one state. Mark every applicable jurisdiction, including zero-rate jurisdictions. A mailing address or an employee’s residence alone does not establish coverage.
Schedule A for credit reduction
Use the selected year’s published rates. A single-state employer can need Schedule A. Use eligible FUTA wages also subject to that jurisdiction’s unemployment law. If all FUTA wages were excluded from state unemployment tax, follow line 9 and skip line 11.
Final or amended Form 940
When the business ends or stops paying wages and will have no future filing liability, check the final-return box, complete and sign, and attach the payroll record custodian’s name and the address of the records. To amend, use the form for the year first reported, mark amended and attach the required explanation.
Late contributions or wages excluded from state tax
When all taxable FUTA wages were excluded from state unemployment tax, use line 9. For only some excluded wages or contributions paid late, use the line 10 worksheet as instructed. The three adjustment lines have different purposes.
Household employment taxes
Household employers generally report on Schedule H. A business with other employees can elect to include household payroll with its business returns if it meets the IRS requirements. See the selected year’s Form 940 instructions.
Agricultural, tribal, exempt or aggregate employers
Farm wages, tribal employers and tax-exempt entities have separate rules. Aggregate filers should check whether the IRS requires Schedule R with Form 940. Use the instructions for your return year.
Credit reductions depend on the year
For 2023, California and New York had 0.6% credit reductions and the U.S. Virgin Islands had 3.9%. For 2024, these were 0.9% and 4.2%, respectively. For 2025, California had a 1.2% reduction and the U.S. Virgin Islands had 4.5%. New York had none that year. Apply the selected year’s Schedule A to eligible wages. Use the final IRS schedule for any later year.
Deposits and filing dates
The 2023 return was due January 31, 2024, or February 12 if all required deposits were timely. The corresponding 2024 return dates were January 31 and February 10, 2025. For 2025, the return was due February 2, 2026, or February 10 if all required deposits were timely. During the year carry an undeposited balance of $500 or less forward. At year-end you may pay $500 or less with the return or deposit it. If liability exceeds $500, follow the deposit deadline in the year’s instructions. A credit reduction is a fourth-quarter liability.
Payroll across state lines
Determine where each worker’s services are covered before completing Schedule A. Remote work, moving during the year, employer headquarters and employee residence can point to different places. Verify state registration and coverage with the relevant unemployment insurance agencies. Find a state unemployment agency.
California tests localization first, then base of operations, direction and control, and finally residence where earlier tests do not decide coverage and some services were performed there. A temporary out-of-state assignment can differ from permanent remote work. A reciprocal election requires approval. California multistate employment guide.
If you file for multiple clients, see the IRS Schedule R instructions. Enter employer identifiers and payroll amounts directly on the official return.