Form 940 (Year 2011) - Employer’s Annual Federal Unemployment (FUTA) Tax Return

What’s New

FUTA tax rate. The FUTA tax rate was 6.2% from January 1, 2011, through June 30, 2011 (quarters 1 and 2), and decreased to 6.0% July 1, 2011, through December 31, 2011 (quarters 3 and 4).

Electronic deposit requirement. You must deposit all depository taxes (such as employment tax, excise tax, and corporate income tax) electronically using the Electronic Federal Tax Payment System (EFTPS).For more information about EFTPS or to enroll in EFTPS, visit the EFTPS website at www.eftps.gov, or call 1-800-555-4477. You can also get Pub. 966, The Secure Way to Pay Your Federal Taxes.

Credit reduction state. A state that has not repaid money it borrowed from the federal government to pay unemployment benefits is a “credit reduction state.” The Department of Labor determines these states. If an employer pays wages that are subject to the unemployment tax laws of a credit reduction state, that employer must pay additional federal unemployment tax when filing its Form 940.

Change of address. Beginning in 2012, employers must use new Form 8822-B, Change of Address—Business, for any address change.

Due Date: 

The due date for filing Form 940 for 2011 is January 31, 2012. However, if you deposited all your FUTA tax when it was due, you may file Form 940 by February 10, 2012.

Resources:

Form 940 Instructions

http://www.irs.gov/pub/irs-pdf/i940.pdf

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Purpose of 941-X

The purpose of Form 941-X is to correct errors on a Form 941 that you previously filed.

Due Date:

What is new?

- Social security tax rate for 2011.   The employee social security tax rate is 4.2% and the employer social security tax rate is 6.2% (10.4% total). Be sure to use the correct rate when correcting amounts reported on lines 8 and 9.

- Section 3121(q) Notice and Demand—Tax due on unreported tips.   A new line has been added to Form 941 for reporting social security and Medicare taxes on unreported tips. An employer now reports the amount of the taxes shown on the Section 3121(q) Notice and Demand on line 5e of the employer's Form 941 for the calendar quarter in which notice and demand is made. Any errors discovered on previously filed Forms 941 for these taxes are corrected on line 11 of Form 941-X. In addition, any errors relating to Section 3121(q) Notice and Demand amounts reported on line 7c of Form 941 (for quarters ending before January 1, 2011) should be corrected on line 11 of Form 941-X.

- Qualified employer's social security tax exemption expired.   The qualified employer's exemption for their share (6.2%) of social security tax on wages/tips paid to qualified employees expired on December 31, 2010. Any errors discovered on previously filed Forms 941 (for quarters ending after March 31, 2010, and before January 1, 2011) for this exemption are corrected on lines 12a–12c of Form 941-X.

- Advance payment of earned income credit (EIC).   The option of receiving advance payroll payments of EIC is no longer available after December 31, 2010. Corrections to advance payroll payments of EIC made before December 31, 2010, can be made on line 18.

To learn more: http://www.irs.gov/instructions/i941x/ch01.html#d0e329