FUTA taxes are paid using EFTPS,
but the deposits must be made separately. Because this tax is so small,
the deposits are infrequent: The IRS wants you only to make deposits quarterly
if your accumulated, but unpaid FUTA tax is more than $500 at the end of any
calendar quarter. At year-end, these payments are reconciled and any balance
due is paid with
0.6% on the first $7,000 of gross income. Employer pays. Do not deduct from employee salary.
Joan earns $25,000 per year. Beginning every January - or whenever Joan is
first employed, your company must pay
times her gross salary for FUTA taxes.
These payments should continue until she has earned $7,000 for the year. At that point,
no more payments are required for that calendar year.
Note: It is irrelevant whether Joan worked for another employer during the year.
The taxes are collected on the first $7,000 in wages paid by each employer.
Deposit how often?
Usually a quarterly deposit requirement.
If the cumulative tax at the end of any quarter exceeds $500,
this tax must be deposited by the last day of the month following the calendar quarter-end:
April 30, July 31, October 31. If at year-end the cumulative tax never reached
$500, do not use this form. Instead, pay the tax with IRS 940 by January 31st.
Pay taxes electronically using EFTPS (free service).
Pay via credit card (with a service fee). There are two approved providers:
Link2Gov Corporation at (888) 729-1040. For questions call (888) 658-5465
If you read IRS information you may see a FUTA rate of 6%, rather than
the 0.6% mentioned in these instructions. This is because there are actually two FUTA
rates - a high one for states without an unemployment insurance program, and a low one
for states which have a program. However, if any of your employees claim they are exempt
from state unemployment insurance but are NOT exempt from FUTA, they may have to pay the
higher FUTA rate.
Even though corporate officers are often exempt from state unemployment tax, they are NOT exempt
from FUTA taxes. To avoid the 6% FUTA rate, it is best to ignore the state exemption and pay the regular state UI tax for
Call the IRS information hotline at (800) 829-4933.