How Do I File Form 940 Online? An Employer’s FUTA eFiling Guide

Employers who pay wages subject to the Federal Unemployment Tax Act (FUTA) generally use Form 940 to report their annual federal unemployment tax liability. Unlike quarterly payroll tax returns, Form 940 is filed once a year and covers FUTA tax for the entire calendar year.

If you plan to file Form 940 electronically, it helps to know how the process works before you begin. Filing the return and paying the tax are separate steps, and simply transmitting the form does not necessarily mean the IRS has accepted it.

How do you file Form 940 electronically? Keep reading to understand who needs to file the return, what information to prepare, where the return is submitted, and how to complete the filing process from start to finish. This Form 940 filing guide also covers important deadlines, IRS acceptance, and common filing situations employers may run into.

Where Do I Actually File Form 940 Online?

Online FUTA filing for employers runs through the IRS Modernized e-File (MeF) system, using IRS-approved software or an authorized IRS eFile provider. IRS Form 940 eFile has no direct fill-in portal on IRS.gov, so you file through one of these eFile options instead.

There are two key points that create confusion. First, Form 940 cannot be submitted through IRIS. Second, paying FUTA tax through EFTPS does not file the return. Filing the return and making the payment are two different things.

You can file Form 940 through 1099Online, offered by Zenwork, Inc., an IRS-listed 94x MeF provider. Once you submit the return, check the filing status to make sure the IRS has accepted it. If the return is rejected, fix the error and submit it again.

Who Is Required to File Form 940?

Under the general FUTA test, you must file Form 940 if either of these conditions applied during the current or previous calendar year:

• You paid at least $1,500 in wages during any single calendar quarter
• You had at least one employee for part of a day in 20 or more different weeks

Full-time, part-time, and temporary employees generally count toward these tests. Partners and properly classified independent contractors do not.

Special rules apply to household employers, agricultural employers, certain tax-exempt organizations, government entities, successor employers, and businesses that use third-party payers. Household employers, for example, are subject to a different wage threshold.

Form 940 reports annual FUTA tax, distinct from Form 941, which generally reports payroll taxes quarterly.

Form 940 Electronic Filing Deadline

Form 940 is generally due by January 31 following the close of the calendar year. When that date falls on a weekend or legal holiday, the deadline moves to the next business day. Employers who deposited all FUTA tax when due and in full may file Form 940 by February 10.

Form 940 eFiling Preparation Checklist

Before you start the return, gather the following:

• Legal business name, EIN, address, and tax year
• Return type: original, amended, or final
• Total employee payments and FUTA-exempt payments
• Wages paid to each employee above the FUTA wage limit
• Total wages subject to FUTA tax and the tax owed for each quarter
• FUTA deposits already made and any credit carried forward from the prior year
• State unemployment wages, tax rates, payment amounts, and payment dates
• Schedule A information, when it applies
• Details for the person authorized to sign the return

Notes:

Before filing, compare each employee’s wages with the FUTA wage limit. Also review your state unemployment tax records, especially any late payments or credit reduction amounts, since these can change the final FUTA tax due.

You also need a supported electronic signature method: a 94x Online Signature PIN, Form 8453-EMP, or Form 8879-EMP if you use the practitioner PIN method through an electronic return originator.

How to File Form 940 Electronically With 1099Online

1099Online provides a guided process for preparing and electronically submitting Form 940 through the Modernized e-File system. The steps below cover a complete filing.

Step 1: Sign In and Select Form 940

Log in to your 1099Online account or create one. From the filing dashboard, choose Form 940 and select the tax year the return covers. Select the year in which the wages were paid, not simply the year in which you are submitting the form.

Step 2: Enter the Employer’s Information

Take care to accurately enter the employer’s legal business name, EIN, the mailing address of the business, any trade name that applies, and the type of return. The name of the business and EIN must be entered exactly as they appear on the Internal Revenue Service’s files.

Step 3: Report Payments and FUTA-Taxable Wages

Here, you’ll report what you paid employees during the year, then separate out any payments that are not subject to FUTA. You’ll also account for wages above the FUTA wage base. Since that limit applies to each employee individually, the calculation has to be done employee by employee rather than against total payroll.

Step 4: Enter State Unemployment Details

You need to enter each state where you were required to pay state unemployment tax, along with the applicable unemployment information. If you were required to pay state unemployment tax in more than one state or paid wages subject to the unemployment tax laws of a credit reduction state, you also have to complete Schedule A (Form 940).

Step 5: Report FUTA Liability and Deposits

Your FUTA tax for the year is reported here along with the deposits already made. Any liability that has to be split by quarter should be placed in the quarter when it arose. The final figures will show whether there is still tax to pay or an overpayment.

Step 6: Review the Completed Return

Before you submit Form 940, check the return once more, especially these:

• The employer’s name and EIN
• Whether the filing year and the return type are correct
• Payments and FUTA-taxable wages
• Required state adjustments and attachments
• Quarterly liability
• Deposits, balance due, or overpayment

Step 7: Complete the Electronic Signature

For this step, you need to know how to electronically sign Form 940. Valid electronic signatures for Form 940 must be completed through an approved process, such as a 94x Online Signature PIN, Form 8879-EMP, or Form 8453-EMP. The IRS does not recognize account passwords as legal return signatures.

Step 8: Submit Form 940 to the IRS

Once you have reviewed and signed, give 1099Online the go-ahead to transmit the return electronically. Keep in mind that filing doesn’t take the place of your FUTA deposits, though an eligible balance due can be paid electronically where that option is supported.

Step 9: Track the Filing Status

Track the return until the IRS marks it as accepted. A status of ‘submitted,’ ‘transmitted,’ or ‘pending’ isn’t final — wait until it changes to ‘accepted.’ If your return is rejected, correct the problem and submit it again.

Store the completed Form 940, along with all supporting schedules, signature records, IRS acceptance receipts, and deposit documentation, for any future IRS audits or inquiries.

Real-Life Form 940 eFiling Scenarios

Frequently Asked Questions

1. Can an employer file Form 940 directly on the IRS website?

No. Employers generally use IRS-approved software or an authorized IRS eFile provider to eFile Form 940.

2. Do I need a 94x Online Signature PIN?

Not always. Depending on the filing method, you may use a 94x Online Signature PIN, a practitioner PIN with Form 8879-EMP, or Form 8453-EMP.

3. Does eFiling Form 940 also pay FUTA tax?

No, sending the return tells the IRS what you owe; it doesn’t move the money. Your FUTA deposits are a separate task.

4. How do I know the IRS accepted my return?

Check the filing status in your account. You’re looking for an “accepted” status. If the IRS rejects the return, fix the issue listed and submit it again.

5. Can I correct Form 940 electronically?

Yes. If your software supports amended Form 940 filings, you can submit the correction electronically. Use an amended return rather than filing another original Form 940.