Where to File Form 940 and How to Submit It Correctly
Learn the correct process for filing Form 940, including submission options, payment handling, and post-filing corrections.
Learn the correct process for filing Form 940, including submission options, payment handling, and post-filing corrections.
Understanding where and how to file Form 940 is essential for businesses to comply with federal unemployment tax requirements. This form, submitted annually by employers, funds unemployment benefits for workers who lose their jobs. Filing accurately helps businesses meet legal obligations and avoid penalties.
The mailing address for Form 940 depends on the business’s location and whether a payment is included. For businesses not including a payment, the address is typically a P.O. Box in Ogden, Utah. If a payment is included, the address changes to a P.O. Box in Cincinnati, Ohio. Businesses should consult the latest IRS instructions for Form 940 on the IRS website to confirm the correct address. Using certified mail or a similar service provides confirmation of receipt.
E-filing is a faster, more secure method for submitting Form 940. The IRS’s e-file system integrates with most tax preparation software, streamlining the process for businesses already using digital tools. This method reduces the risk of manual errors, as tax software often includes checks for common mistakes.
The IRS website offers a detailed guide for businesses new to e-filing, outlining the steps to register and submit Form 940 electronically. Many tax software providers also offer customer support to assist with challenges.
Payments tied to Form 940 must meet Federal Unemployment Tax Act (FUTA) requirements. As of 2024, the standard FUTA tax rate is 6.0% on the first $7,000 of each employee’s wages. Businesses may qualify for a credit of up to 5.4% if they are current with state unemployment taxes, effectively reducing the federal rate to 0.6%.
If cumulative FUTA tax liability exceeds $500 in a quarter, deposits must be made through the Electronic Federal Tax Payment System (EFTPS). This secure platform ensures compliance and provides immediate payment confirmation, creating a clear audit trail.
The IRS allows businesses to correct errors on Form 940 by filing Form 940-X, Adjusted Employer’s Annual Federal Unemployment (FUTA) Tax Return or Claim for Refund. This form requires a detailed explanation of the changes, the reason for the correction, and supporting documentation.
For instance, if an incorrect wage base was reported, attaching payroll records can substantiate the correction. Providing clear explanations and documentation streamlines the IRS review process and reduces the likelihood of further inquiries.