Schedule B— COMPUTATION OF TAXABLE WAGES

(See Schedule B instructions on back of copy for District Director)

1. Total remuneration (including exempt remuneration) PAID during the calendar year for services of

employees

Exempt remuneration:
LIST EACH TYPE OF EXEMPTION

Approximate number of

employees involved Amount paid

2, Remuneration in excess of $3,000. (Enter only the excess
over the first $3,000 paid to individual employees)...

3. All other exemptions (Explain each exemption shown, at-
taching additional sheet if necessary):

XXXXXXX/XXXXXXXX

5. Total taxable wages (line 1 minus line 4), Enter this amount in Item 1 on other side --

GENERAL INSTRUCTIONS

The instructions below tell you details for preparing and filing Form
940. Additional instructions are contained in Circular E, which has
been furnished to employers in connection with (2) Income tax with-
holding, (6) taxes under the Federal Insurance Contributions Act, and
(6) the tax under the Federal Unemployment Tax Act. Circular E may
be obtained from your District Director of Internal Revenue upon
request.

Employers should refer to Circular E for information as to the em-
ployers who are liable for filing a return on Form 940, the types of
payments defined by law as wages, and the kind of services covered by
the Federal Unemployment Tax Act.

Purpose of Form 940, — This form is provided for the annual
reporting of the tax under the Federal Unemployment Tax Act.

Who must file. — Every employer who had 4 or more employees
on at least 1 day of each of 20 calendar weeks in a calendar year must
file a return on Form 940 for such year. In case of a change of owner-
ship or other transfer of the business during the year, each employer
who had 4 or more employees on at least 1 day of each of 20 calendar
weeks in the calendar year must file a return on Form 940, but neither
should report wages paid by the other.

After you have once filed a taxable return on Form 940, you will
receive a preaddressed form near the close of each calendar year. If the
form should fail to reach you or if you filed a nontaxable return, re-
quest a Form 940 from your District Director so that you can make
your return on time,

If a statutory merger or consolidation occurs during the calendar
year, the obligation of the continuing corporation to make a return on
Form 940, and the reporting of wages and credits on such return, are
the same as if the continuing corporation and the dissolved corpora-
tion of corporations constituted one person during the calendar year.

Due date of annual return. — The annual return on Form 940 is
due on or before January 31 with respect to the preceding calendar
year unless the employer obtains from his District Director an exten-
sion of time within which to file the return.

Unless already shown on the preaddressed form received, enter in
the spaces at the right of the employer's name the calendar year for
which the return is filed.

Where to file. — The original of this form is to be sent to the
District Director of Internal Revenue for the district in which the
employer's principal place of business is located. An employer who has
no place of business in the United States should file with the Director
of International Operations, Internal Revenue Service, Washington 25,
D.C. Employers whose principal place of business is in Puerto Rico
should file with the Director of International Operations, U. , Internal
Revenue Service, 1105 Fernandez Juncos Avenue, Santurce, Puerto Rico.

Payment of tax. — The total tax due must be paid in full with the
return.

Employer’s name, address, and identification number. — Pre-
addressed Forms 940 should be used in filing returns. If the pre-
addressed form is lost, a new one should be requested. If necessary
to use a form not preaddressed, type or print in the address block the
employer's correct name and address, and enter the employer's identifi-
cation number in the space at the right of the address block. Do not
use the identification number assigned to a prior owner.

Penalties and interest. — Avoid penalties and interest by filing
a correct return on time, and by paying the proper amount of tax with
the return. The law provides a penalty for late filing unless reasonable
cause is shown for the delay. If you are late in filing a return, send a
full explanation in writing with your return.

Penalties also are imposed by law for willful failure to pay tax, keep
records, make returns, of for false or fraudulent returns.

Credit for contributions paid into State funds. — In general, an
employer may credit against the tax the amount of required contribu-
tions paid by him with respect to the calendar year under all State laws
which have been duly approved: Provided, That no credit will be allow-
able for contributions under a State law if such State is not duly certified
for the calendar year. ‘The term “contributions” means payments te-
quired by a State law to be made into an unemployment fund by any
person on account of having individuals in his employ, to the extent
that such payments are made by him without being deducted or de-
ductible from the remuneration of individuals in his employ. Contri-
butions may be credited against the tax whether or not they ate paid
with respect to “employment.” Do not take credit, however, for
voluntary contributions or for penalty or interest paid to a State.

To be allowable as credit against the tax, contributions must have
actually been paid into a State unemployment fund on or before the
due date of this return ot the due date as extended; except that contri-
butions paid after the due date or the due date as extended, may be
credited in an amount not to exceed 90 percent of the amount which
would have been allowable as credit on account of such contributions
had they been paid on or before such due date,

‘An employer who has been granted an “experience” rate lower than
2.7 percent by a State for the whole, of part, of che year may be entitled
to an additional credit against the tax under Section 3302(b) of the
Federal Unemployment Tax Act. If the provisions of the State law
under which a taxpayer has been granted a reduced rate are not certified,
of ate only partially certified, the amount of additional credit claimed
on this return may be disallowed in whole or in part.

Under section 3302 (e) a special credit is provided if an employer dur-
ing any calendar year acquires substantially all che property used in the
trade or business (or in a separate unit of a trade or business) of another
person who is not an “employer” (of 4 or more employees on at least
1 day of each 20 calendar weeks in that year), and immediately after
the acquisition the successor employs in his trade or business one or
more individuals who immediately prior to the acquisition were employ-
ed in the trade ot business of the predecessor. This special credit is not
allowable to any successor employer whose predecessor also is an “em-
ployer,” nor is it allowable to a corporation acquiring the trade or bu
ness of another corporation in a statutory merger or consolidation. The
amount of the special credit is based on the amount of remuneration,
subject to the unemployment compensation law of a State, paid by the
predecessor to those employees who were employed by the predecessor
immediately before the transfer of the trade or business (or separate
unit thereof) and who also were employed by the successor immediately
after the transfer.

The total credit for contributions paid to State unemployment funds
under Section 3302(b) may not exceed 2.7 percent of such wages.

(See also the inseructions on the back of copy for District Director)


FORM 940 EMPLOYER’S ANNUAL FEDERAL UNEMPLOYMENT TAX RETURN

GAN. 1963)
U.S. Treasury Department — Internal Revenue Service

Employer Identification No. (District Director’s Uso)

— Enmployer’s
name and Calendar Year

dress
(iat > 1962 po
vores Ht po, jonger,, In business
printed

change) Etterttrti tt

1. Total taxable wages paid during calendar year (Enter amount from Item 5 of Schedule B, on other side)
2. Gross Federal tax (3.5% of wages in Item 1)
3. Less: Credit from Item 18 of Schedule A _
4, Remainder of tax (Item 2 minus Item 3). Pay to “INTERNAL REVENUE SERVICE” ———>

T declare under penalties of perjury that this return (including any accompanying schedules and statements) has been examined by me and to the
best of my knowledge and belief is a true, correct, and complete return, and that no part of any payment made to a State unemployment fund
which is claimed as a credit in Item 3 above was or is to be deducted from the remuneration of employees.

BE SURE TO ENCLOSE REMITTANCE WITH THIS RETURN

U.S, TREASURY DEPARTMENT POSTAGE AND FEES PAID

District Director of Internal Revenue INTERNAL REVENUE SERVICE

OFFICIAL BUSINESS

Employer Identification No.
Employer's
name
name and Calendar Year POSTMASTER:
(At nat 1962
correctly
printed please Part 355.56 of the Pos-
change) tal Manual
Schedule A-—- COMPUTATION OF CREDIT AGAINST FEDERAL UNEMPLOYMENT TAX
ti 1 i bl Additional Contributions
Name of Suto | showy on employers Tanai rayrat | aeons Poot | expance| “Tbea zy, | alee ae credit anual paid
State contribution returns (As defined in State act) als (col. X 29) (col. 7 X col. 9) | (Col. 10 minus col, 11) to State
©) © a) | From— Te 9) io) (ai) (2) (3)
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TOTALS. _. XXX [XXX [XXX] XXXX XXXX

14. Total tentative credit (Column 12 plus column 13) __
15. Enter here 2.7% of amount of wages in Item 1 above.
16. Item 14 ot 15 whichever is smallet. fee
17. Amount, if any, of wages in Item 1 attributable to Alaska and Michigan
(a) Alaska $__ _X .003 (Multiply and enter here) $
(b) Michigan $_ “X .0015 (Multiply and enter here) $
18. Credit allowable (Item 16 less Item 17). Enter here and in Item 3 above.

EMPLOYERS — DO NOT USE SPACE BELOW

‘State reporting Experience rate period Dates and amounts of contributions Contributions actuall
umber 25 shown Taxable Payal id tos 4
on employer's State (As defined in State act) From— | To— rate atually pd Stale alt fe State hetore

contribution returns

TO THE DISTRICT DIRECTOR OF INTERNAL REVENUE:
Thereby certify that except as noted above, the records of this office agree with the entries made by the employer in columns (6), (7), (8),
(9), and (13) of Schedule A, and that all contributions were paid before February 1.

Name of Name of
State Officer State

FILE THIS FORM WITH YOUR DISTRICT DIRECTOR OF INTERNAL REVENUE NOT LATER THAN JANUARY 31, 1963



Schedule B— COMPUTATION OF TAXABLE WAGES
(See Schedule B instructions below)

1. Total remuneration (including exempt remuneration) PAID during the calendar year for services of
employees.__-__.-.-_------_-----------.--.-.---

Exempt remuneration:
LIST EACH TYPE OF EXEMPTION

Approximate number of
employees involved

2, Remuneration in excess of $3,000. (Enter only the excess
over the first $3,000 paid to individual employees).

3. All other exemptions (Explain each exemption shown, at-
taching additional sheet if necessary):

4

Total exempt remuneration. _

xXXXXXXX/]XXXXXXXX

5. Total taxable wages (line 1 minus line 4), Enter this amount in Item 1 on other side.

HOW TO PREPARE SCHEDULE A— COMPUTATION OF CREDIT AGAINST FEDERAL UNEMPLOYMENT TAX

Schedule A should be completely and carefully filled in, in accordance
with the numbered items below, in order that the correct amount of
credit can be determined. All columns (5 to 13) of this schedule are to
be used by taxpayers who have been granted an “experience rate” lowet
than 2.7 percent by a State for the whole, or part, of the taxable year.
If you have not been granted an “experience rate,” use columns 5, 6, 7,
and 13 only. If you have been granted an “experience rate” higher
than 2.7 percent, use columns 5, 6, 7, 8, 9, and 13 only. Ifa State has
granted an experience rate on part of your payroll, that part to which
the experience rate does not apply should be entered separately, using
columns 5, 6, 7, and 13 for this purpose. If you were granted an ‘‘ex-
perience rate” for a part of the year only, of your “experience rate”
was changed during the year, show in the proper columns the period
of the year to which each separate rate applied, the payroll, rate of
contributions, and required contributions with respect to each such
period,

Column 5, — Enter in Column 5 the name of the State or States (in-
cluding Puerto Rico) to which contributions were required to be paid.

Col. 6, — Enter in column 6 your State reporting number as shown
on your State contribution return. If you had employment in more
than one State, enter the reporting number assigned to you by each
such State.

Col. 7.— Enter in column 7 the taxable payroll on which you are
required to pay contributions into the unemployment fund of the State
indicated in column 5 of, if you have been granted an “experience rate”
of zero, the amount upon which you would have been required co make
contributions had such rate not been granted.

Col. 8.— Enter in columa 8 the period or periods of the year to
which the “experience rate” ot rates apply.

Col. 9, Enter in column 9 the “experience rate” or rates granted
to you by the State or States for the period or periods shown in col-
umn 8.

Col. 10. — Section 3302(b) of the Federal Unemployment Tax Act
requires a determination of the amount of contributions an employer
with an “experience rate” would have been required to pay if through-
out the taxable year he had been subject to the highest rate applied by
the State in the taxable year to any person having individuals in his
employ or to a rate of 2.7 percent, whichever rate is lower. For the
purpose of this return, the taxpayer should assume that the highest
rate applied under the State law in the taxable year was not lower than

2.7 percent and use that rate in computing the amount shown in columa
10. If it is determined that the highest rate applied by the State was
lower than 2.7 percent, the amount of additional credit computed with
respect to such State will be reduced accordingly.

Col. 11. — Multiply che payroll in column 7 by the “experience rate”
in columa 9 and enter the result in column 11.

Col. 12. — Subtract the amount in column 11 from the amount in
column 10 and enter the difference in column 12.

Col. 13. — Enter in column 13 the amount of contributions actually
paid into the State funds.

Item 14.— Enter the sum of the totals appearing in columns 12
and 13. Also include the amount of any special credit as explained
after item 17 below.

Item 17.— Enter in Item 17 (a) and/or (b) the amount (if any) of
wages, as defined in the Federal Unemployment Tax Act, paid in 1962
which are subject to the unemployment compensation law of Alaska
and/or Michigan ot which are otherwise attributable to Alaska and/or
Michigan. (If in doubt, ask the District Director of Internal Revenue.)
Such amount, multiplied by .003 for Alaska and .0015 for Michigan,
is a credit reduction required by section 3302 (c) (2) of the Act. If
the employer paid no wages attributable to Alaska or Michigan, en-
ter “None” or “0” in Item 17 (a) and/or (b).

Special credit. — If special credit is claimed as a successor employer
(see the next-to-last paragraph on page 4) attach a written stacement
showing (a) the name, address, and employer identification number of
the predecessor, (b) the method of acquisition of the predecessor's
trade or business (or a separate unit thereof), (c) the date on which the
acquisition occurred, (d) each of the items of information in columns
5 through 13 of Schedule A applicable to the predecessor, (e) the num-
ber of individuals employed by the predecessor immediately prior to
the acquisition who also were employed by the successor employer
immediately after the acquisition, (f) the total amount of remuneration,
subject to the unemployment compensation law of a State, paid to such
employees by the predecessor during the calendar year. The amount
of the special credit is determined by (1) adding the amounts determined
for the predecessor (in step (d), above) as “Additional credit” and as
“Contributions actually paid co Stace” and (2) multiplying this total
by a fraction of which the numerator is the amount determined in step
( above, and the denominator is the amount determined (in step (4),
above) as “Taxable Payroll (as defined in State Act).”

HOW TO PREPARE SCHEDULE B— COMPUTATION OF TAXABLE WAGES

Line 1.—Total remuneration (including exempt remunera-
tion) PAID during the calendar year for services of employees.
— Enter in line 1 of Schedule B the total amount of remuneration for
services paid to employees during the calendar year, regardless of
whether such remuneration is taxable, Such remuneration should in-
clude salaries, wages, commissions, fees, bonuses, vacation allowances,
salaries and wages paid to temporary or part-time employees, the value
of goods, lodging, food and clothing, and all amounts deducted from
employees’ wages as employee tax or as deductions for other reasons.
The basis upon which the remuneration is paid is immaterial in deter-
mining whether the remuneration constitutes wages. Thus, it may be
paid on the basis of piecework, or a percentage of profits; and it may
be paid hourly, daily, weekly, monthly, or annually.

The medium in which the remuneration is paid is also immaterial.
It may be paid in cash or in something other than cash, as for example,
goods, lodging, food, or clothing. Remuneration paid in items other
than cash should be computed on the basis of the fair value of such
items at the time of payment.

Exempt remuneration. — The terms “wages” and “employment”

as defined for Federal unemployment tax purposes do not include every
payment of remuneration to an employee and every kind of service
which an employee may perform. In general, any remuneration which
is excluded from “wages” and any remuneration for services which are
excepied from “employment,” are not included in the total wages
subject to the tax. These remuneration payments may be deducted
from the total remuneration paid only if they are identified in Schedule
B.

Line 2.— Enter in line 2 the approximate number of employees
who received more than $3,000 from you during the year and the
aggregate amount of the excess above $3,000 paid to all such employees.
For example, assume that you had 10 employees, and that you paid
each of them $5,000 during the year. $50,000 should be included in
line 1 and $20,000 in line 2.

Line 3.— Enter in line 3 such items as (1) Agricultural labor, (2)
benefit payments for sickness or injury, under a workmen’s com-
pensation law, insurance plan and certain employer plans, (3) domestic
service, (4) family employment, (5) certain fishing activities, and (6) any
other exempt payments or services. For more definite information
with respect to these exemptions, see Circular E, Employer's Tax Guide.

(For General Instructions, see back of copy for employer)

Page 2


FORM 940 EMPLOYER'S ANNUAL FEDERAL UNEMPLOYMENT TAX RETURN

GAN. 1963)
U.S. Treasury Department — Internal Revenue Service
Employer Identification No.
Calendar Year
> 1962
If no longer business
write “Fi "

1. Total taxable wages paid during calendar year (Enter amount from Item 5 of Schedule B, on other side)
2. Gross Federal tax (3.5% of wages in Item 1) _
3. Less: Credit from Item 18 of Schedule A___

4, Remainder of tax (Item 2 minus Item 3). Pay to “INTERNAL REVENUE SERVICE” ———> | ——________,

Hl |

VOUR GOPY

Schedule A— COMPUTATION OF CREDIT AGAINST FEDERAL UNEMPLOYMENT TAX

Sate reporting nambor Experience rate pariod Contributions had Adalional
Name of State | a8 shown on employer's (8) Experience) rate been 2.7% credit
‘State contribution returns oS tte (col. 7 X 2.1%) (col. 10 minus col. 11)
3) © From= |_| Go) a2
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ToTALs. _- XXX [Xxx [xxx | xXxxx XXXX

14, Total tentative credit (Column 12 plus column 13) ___
15. Enter here 2.7% of amount of wages in Item 1 above.
16. Item 14 or 15 whichever is smaller, ee
17, Amount, if any, of wages in Item 1 attributable to Alaska and Michigan _
(a) Alaskka$ X -003 (Multiply and enter here) $.

(b) Michigan$ X .0015 (Multiply and enter here) $__
18. Credit allowable (Item 16 less Item 17). Enter here and in Item 3 above

THIS COPY MUST BE
KEPT BY EMPLOYER

This copy, and each related schedule or statement which the employer is required to keep, must be carefully preserved
by the employer, for a petiod of 4 years after the date the tax is due, or the date the tax is paid, whichever is the later. Such

copies should at all times during this period be available for inspection by officers of the Internal Revenue Service.