File 940 Online for 2026 Tax Year

What Is Form 940?

Form 940 is an Employer’s Annual Federal Unemployment Tax Return (FUTA). The purpose of this form is to report and calculate an employer’s FUTA tax. The FUTA tax helps finance unemployment compensation programs for eligible workers. FUTA tax is payable by employers but not by withholding from employee wages.

Usually, the purpose of using Form 940 for employers is to record all payments to employees, find the amount that is exempted from the FUTA tax, calculate FUTA-taxable wages, state unemployment tax credit, and determine whether a refund or tax overpayment is due.

Who Needs to File Form 940?

Generally, most businesses that meet the FUTA filing requirements need to file Form 940. The basic requirement for an employer to file Form 940 is meeting at least one of the following criteria:

• It must have remunerated its employees with at least $1,500 worth of wages for any calendar quarter during the year, or
• It must have had at least one employee during at least some part of the day in 20 or more different weeks during the year.

There are specific exceptions that can apply to certain categories of employers like household employers, agricultural employers, and others.

What Must Be Reported on Form 940?

Form 940 is used to report the information needed to calculate an employer’s annual FUTA tax liability. This includes:

• Total payments made to employees during the year
• Payments exempted from FUTA taxes
• FUTA-taxable wages
• Unadjusted FUTA tax
• State unemployment tax credits
• Amount of any credit reductions (if wages were paid in a credit reduction state)
• FUTA tax deposits made in the year
• FUTA tax due or refund due or overpayment

Employers who have paid wages in two or more states, or those who have paid wages in credit reduction states should provide Schedule A of Form 940.

What’s New in Form 940 Under the Latest Available IRS Guidance?

Based on the latest IRS guidelines, there are multiple changes to Form 940 that will affect employers filing taxes for the 2026 tax year.

According to the IRS, aggregate return filers should determine whether they are filing as an agent under section 3504, as a certified professional employer organization, or any other third-party filer.

Additional information in current IRS guidance includes direct deposit for Form 940 refunds, electronic filing of Form 940 balance due payments, electronic access to Form 940 return transcripts, and electronic filing of Form 940 amendments using Modernized e-File.

Current Form 940 instructions also mention the One Big Beautiful Bill Act. According to the IRS guidance, the Act will permanently repeal moving expense reimbursement and bicycle commuting exclusions after the 2025 tax year, and additional details are expected in the 2026 Form 940 instructions.

For employers, this means their payroll teams should review fringe benefits, FUTA wages, and exempt payments before filing Form 940 for 2026.

Form 940 Filing Requirements

Any employer that meets the FUTA filing requirements can file Form 940 to the IRS together with information regarding their annual taxable FUTA wages. FUTA tax is calculated separately from other payroll taxes like, federal income tax, Social Security tax, and Medicare tax.

The gross FUTA tax rate is 6.0%. However, for those employers who can claim the full credit under the state unemployment taxes, the amount of credit could go up to 5.4% of FUTA wages. This means that only 0.6% of FUTA wages will be payable in form of tax. In order to get the maximum 5.4% FUTA credit, an employer must make full payment of the state unemployment taxes before the deadline and the state must not be a credit reduction state.

Tax deposits must be made using electronic funds transfer system (EFT), such as EFTPS, IRS Direct Pay, or an IRS business tax account. Payroll records should be available for any adjustment or payment of state unemployment tax while filing Form 940.

Due Date of Form 940 for 2026 Calendar Year

Standard Due date: January 31

Extended Due Date: February 10

For 2026 calendar year, January 31, 2027 falls on a Sunday. Therefore, the new Form 940 due date is February 1, 2027 (Monday).

Note: If the FUTA tax deposit is completed by the due date, then the employers qualify for an automatic 10-day filing extension.

E-file Form 940 Using 1099Online

1099Online allows for easy preparation and electronic filing of Form 940. Employers can simply enter their information, review the FUTA taxes, and eFile the form with the IRS.

Step 1: Enter Form Data

Select Form 940 and enter the data manually or bulk-import information using your preferred upload method (Excel or CSV file). Add any missing information manually if needed.

Step 2: Check the FUTA Taxes and Deposits

Review your FUTA tax computations, deposits made, adjustments, tax due, or refund. Also, complete Schedule A if you paid wages in multiple states or credit‑reduction states.

Step 3: Submit Form 940 to the IRS

Confirm your information for accuracy and submit it electronically to the IRS via 1099Online. Track the filing status and receive confirmation once the return is accepted.

Form 940: Frequently Asked Questions