Form 940 (1989)

Page 4

Part |.—Computation of Taxable Wages

Line 1—Total payments.—Enter the total
Payments you made to employees during the
calendar year, even if they are not taxable.
Include salaries, wages, commissions, fees,
bonuses, vacation allowances, amounts paid to
temporary or part-time employees, and the value
of goods, lodging, food, clothing, and noncash
fringe benefits. Also include the amount of tips
reported to you in writing by your employees.
Enter the amount before any deductions.

How the payments are made is not important
in determining if they are wages. Thus, you may
pay wages for piecework or as a percentage of
profits, and you may pay wages hourly, daily,
weekly, monthly, or yearly. You may pay wages in
cash or some other way, such as goods, lodging,
food, or clothing. For items other than cash, use
the fair market value at the time of payment.
Line 2—Exempt payments.—‘Wages” and
“employment"’ as defined for FUTA purposes do
not include every payment and every kind of service
an employee may perform. In general, payments
excluded from wages and payments for services
excepted from employment are not subject to tax.
You may deduct these payments from total
payments only if you explain them on line 2.

Enter items like the following:

(1) Agricultural labor, if you didn't meet either
of the tests in Agricultural Employers on page 2.

(2) Benefit payments for sickness or injury
under a worker's compensation law.

(3) Household service if you did not pay cash
wages of $1,000 or more inany calendar quarter
in 1988 and 1989.

(4) Certain family employment.

(5) Certain fishing activities.

(6) Noncash payments for farmwork or
household services in a private home that are
included on line 1. Only cash wages to these
workers are taxable.

(7) Value of certain meals and lodging.

(8) Any other exempt service or pay.

For more information, see Circular E.

Line 3.—Enter the total amounts over $7,000
you paid each employee. For example, if you have
10 employees to whom you paid $8,000 each
during the year, enter $80,000 on line 1 and
$10,000 on line 3. Only the first $7,000 paid to
your employee is subject to FUTA tax. Do not use
the state wage limitation for this entry.

Line 5—Total taxable wages.—If any part of
these wages is exempt from state unemployment
taxes, you must fill out Parts Ill and V. For
example, if you pay wages to corporate officers in
a state that exempts these wages from its
unemployment taxes (these wages are taxable for
FUTA tax), you would check the box in C on page
1 and complete Parts II! and V.

Part Il.—Tax Due or Refund

Use this part only if you checked “Yes” for both
questions A and B on page 1, and did not check
the box in C. The tax rate of .008 gives you credit
for your payments to your state’s unemployment
fund

Part III.—Tax Due or Refund
Use this part if you do not qualify for Part II

Line 3,—Enter the smaller of Part V, line 11, or
Part Ill, ine 2. This is the credit allowable for your
payments to state unemployment funds. If you do
not have to make payments to the state, enter “O”
on this line,

Part IV.—Record of Federal Tax Liability

Complete this part if your total tax (Part Il, line 1
or Part Ill, ine 4) is over $100. To figure your
FUTA tax liability for each of the first 3 quarters
of 1989, multiply by .008 that part of the first
$7,000 of each employee's annual wages you
paid during the quarter. Enter this amount under
that quarter.

Your liability for the 4th quarter is the total tax
(Part Il, line 1 or Part Ill, line 4) minus your
liability for the first 3 quarters of the year. The
total liability must equal your total tax. Otherwise,
you may be charged a failure to deposit penalty
figured on your average liability.

Depositing FUTA Tax.—Generally, FUTA taxes
are deposited on a quarterly basis. If your liability
for any of the first 3 quarters of 1989 (plus any
undeposited amount of $100 or less from any
earlier quarter) is over $100, deposit it by the last
day of the first month following the close of the
quarter. If it is $100 or less, carry it to the next
quarter; a deposit is not required. If your liability
for the 4th quarter (plus any undeposited amount
from any earlier quarter) is over $100, deposit the
entire amount by January 31, 1990. If it is $100
or less, you can either make a deposit or pay it
with your Form 940 by January 31, 1990.

Note: The total amount of all deposits must be
shown in Part Il, ine 2 or Part Ill, line 5.

If you deposited the correct amounts,
following these rules, the balance due with Form
940 will never be more than $100.

Deposit FUTA tax in an authorized financial
institution or the Federal Reserve bank for your
area. To avoid a possible penalty, do not mail
deposits directly to IRS. Records of your deposits
will be sent to IRS for crediting to your business
accounts. See Identifying Your Payments on
page 2.

You must use a Form 8109, Federal Tax
Deposit Coupon, when making each tax deposit.
IRS will send you a book of deposit coupons when
you apply for an employer identification number.
Follow the instructions in the coupon book. If you
don’t have coupons, see Circular E.

Taxpayers who willfully claim credit for
deposits not made are subject to fines and other
criminal penalties.

Part V.—Computation of Tentative
Credit

Complete this schedule if you checked the “No”
box in either question A or B on page 1, or if you
checked the box in C on page 1. If you have been
assigned an experience rate by your state of 0%
or more, but less than 5.4% for all or part of the
year, use columns 1 through 9. If you have not
been assigned any experience rate by your state,
use columns 1, 2, 3, and 9 only. If you have been
assigned a rate of 5.4% or higher, use columns 1,
2, 3,4, 5, and 9 only. If you were assigned an
experience rate for only part of the year or the
rate was changed during the year, complete a
separate line for each rate period.

Column 1.—Enter the name of the state(s)
(including Puerto Rico and the Virgin Islands) that
you were required to pay contributions to.
Column 2.—Enter the state reporting number
that was assigned to you when you registered as
an employer with each state.

Column 3.—Enter the taxable payroll on which
you must pay taxes to the unemployment fund of
each state in column 1. If your experience rate is
zero, enter the amount of wages that you would
have had to pay on if the rate had not been granted.

Columns 4 and 5.—Your “state experience rate”
is the rate at which the state taxes your payroll for
state unemployment purposes. This rate may be
adjusted from time to time based on your
“experience” with the state fund, that is,
unemployment compensation paid to your former
employees and other factors. If you do not know
your rate, contact your state unemployment
insurance service.

Column 8.—Subtract column 7 from column 6. If
zero or less, enter “‘0.""

Column 9.—Enter contributions actually paid
into the state fund by the due date of Form 940.
Do not include any special assessments, surtaxes,
surcharges, etc., used by the state to pay interest
on unrepaid advances from the Federal
Government.

Line 10.—Enter the totals of columns 3, 8, and 9
on this line.

Line 11.—Add line 10, columns 8 and 9 only.
The allowable credit for state contributions you
make after the due date for filing Form 940 may
not be more than 90% of the credit that would
have been allowed if you had paid the state
contributions by the due date. For example, if
$1,500 of state contributions was paid on time,
and $1,000 was paid after the due date for filing
Form 940, the total tentative credit on line 11
(assuming no additional credit (column 8)) would
be $2,400 ($1,500 + $900 (90% of $1,000)).
Note: /f you are receiving additional credit
(column 8) because your state experience rate is
less than 5.4%, the additional credit is not subject
to the 90% limitation.


940 Employer’s Annual Federal |_OMB No. 1545-0028 _
Form Unemployment (FUTA) Tax Return 19 89

Department of the Treasury

Internal Revenue Service > For Paperwork Reduction Act Notice, see page 2.
IName (as distinguished from trade name) Calendar year FF
If incorrect, %
‘make ary » Trade name, if any FP
necessary J
change. ‘Address and ZIP code Employer identification number T
L P=]
A. Did you pay all required contributions to state unemployment funds by the due date of Form 940? (See instructions if none required.) . . - [] Yes CL] No
If you checked the "Yes" box, enter the amount of contributions paid to state unemployment funds. . . . . . .P$_.
B Are you required to pay contributions to only one state?
Ifyou checked the “Yes” box: (1) Enter the name of the state where you are required to pay contributions. . . . . . Ph.

(2) Enter your state reporting number(s) as shown on state unemployment tax return. ___
C If any part of wages taxable for FUTA tax is exempt from state unemployment tax, check the box. (See the Specific Instructions on page 2.)..
Note: /f you checked the “Yes” boxes in both questions A and B and did not check the box in C above, you may be able to use Form 940-EZ.

| Part || Computation of Taxable Wages (to be completed by all taxpayers)

Total payments (including exempt payments) during the calendar year for services of employees... . . . | 2
2 Exempt payments. (Explain each exemption shown, attaching additional sheets if Amount paid
necessary.) > - |
2!
3 Payments for services of more than $7,000. Enter only the excess over the first $7, 0060
paid to individual employees not including exempt amounts shown on line 2. Do not use | 3
the state wage limitation. . Loe

4 Total exempt payments (add lines 2and3). . . 4
5 _Total taxable wages (subtract line 4 from line 1). (If any part is exempt from state contributions, see instructions.) > | 5
Tax Due or Refund (Complete if you checked the “Yes” boxes in both questions A and B and did not check the box in C above.)

1 Total FUTA tax. Multiply the wages in Part |, ine 5, by .OO8andenterhere, . .. 14
2 Total FUTA tax deposited for the year, including any overpayment applied from a prior year (from your records) 2
3 Balance due (subtract line 2 from line 1). This should be $100 or less. PaytoIRS . >» [3
4__Overpayment (subtract line 1 from line 2). Check ifit is tobe: L]_Appliedtonext return, orl} Refunded» | 4
Part it] Tax Due or Refund (Complete if you checked the “No” box in either question A or B or you checked the box in C above. Also complete Part V.)
1

1 Gross FUTA tax. Multiply the wages in Part I, line 5, by .062
2 Maximum credit. Multiply the wages in Part I, line 5, by .054 , :
3 Credit allowable: Enter the smaller of the amount in Part V, line 11, or Part ijtine2. . L3 Gy
4 Total FUTA tax (subtract line 3 from line 1). to
5 Total FUTA tax deposited for the year, including any overpayment applied fr. from a prior year ar (from your records)
6 Balance due (subtract line 5 from line 4). This should be $100 or less. PaytoIRS. . >
7 Overpayment (subtract line 4 from line 5). Check if itis tobe: [] Applied to next return, 0 or g Refunded >
Record of Quarterly Federal Tax Liability for Unemployment Tax (Do not include state liability.)

Quarter First Second Third Fourth Total for Year

Liability for quarter
Computation of Tentative Credit (Complete if you checked the “No” box in either question A or B or you checked the box in C above—see instructions.)

lolol e

Name [State reporting number(s)] taxable payroll [State ex] Contributions if ] Contributions | Additionalcredit ] Contributions
of | as shown on employer's | (as defined in state act) State experience rate period I penence rate had been 5.4%| payable at experience | (col. 6minuscol.7) | actually paid to
state |state contribution returns 4 rate (col. 3x.054) | rate (col. 3x col. 5) |IfOorless, enter0. the state
1 2 3 From— To— 5 6 7 8 9
10 Totals...
11 Total tentative credit (add line 10, columns 8 and 9 only—see instructions for limitations) _._. _ >
Ifyou will not have to file returns in the future, write “Final” here (see general instruction “Who Must File") and sign the return. >

Under penalties of perjury, | declare that I have examined this return, mcluding accompanying schedules and statements, and to the best of my knowledge and belief, its true, correct, and
complete, and that no part of any payment made to a state unemployment fund claimed as a credit was or 1s to be deducted from the payments to employees.

Signature > Title (Owner, etc.) > Date >

Form 940 (1989)


Form 940 (1989)

Page 2

Paperwork Reduction Act Notice.—We ask for this
information to carry out the Internal Revenue
laws of the United States. We need it to ensure
that taxpayers are complying with these laws and
to allow us to figure and colléct the right amount
of tax. You are required to give us this
information.

The time needed to complete and file this form will
vary depending on individual circumstances. The
estimated average time is:

Recordkeeping . 14hrs., 7 min.
Learning about the

law or the form . 18 min.
Preparing and sending

theformtoIRS . . . 32 min.

If you have comments concerning the accuracy of
these time estimates or suggestions for making this
form more simple, we would be happy to hear from
you. You can write to the Internal Revenue Service,
Washington, DC 20224, Attention: IRS Reports
Clearance Officer, T:FP; or the Office of
Management and Budget, Paperwork Reduction
Project (1545-0028), Washington, DC 20503.

Changes You Should Note

New Form 940-EZ.—For 1989, you may be able to
use new Form 940-EZ. Form 940-EZ is a simplified
version of Form 940 which can be used by most
employers. Generally, employers who pay all
unemployment contributions to only one state ina
timely manner and do not have taxable FUTA wages
that are exempt from state unemployment tax, can
use Form 940-EZ. Get Form 940-EZ for more details
Credit Reduction States. —For 1989, there are no
credit reduction states.

General Instructions

Purpose of Form.—The Federal Unemployment Tax
Act (FUTA), together with state unemployment
systems, provides for payments of unemployment
compensation to workers who have lost their jobs.
Most employers pay both a Federal and state
unemployment tax. Use this form for your annual
FUTA tax report. Only the employer pays this tax.

Who Must File

Household Employers. —You do not have to file this.
form unless you paid cash wages of $1,000 or more
in any calendar quarter in 1988 or 1989 for
household work in a private home, local college club,
or a local chapter of a college fraternity or sorority.
Note: See Pub. 926, Employment Taxes for
Household Employers, for more information.

In General.—You must file this form if you were
other than a household or agricultural employer
during 1988 or 1989, and you: (a) paid wages of
$1,500 or more in any calendar quarter or (b) had
one or more employees for some part of a day in any
20 different weeks. Count all regular, temporary,
and part-time employees. A partnership should not
count its partners. If there is a change in ownership
or other transfer of business during the year, each
employer who meets test (a) or (b) above must file.
Neither should report wages paid by the other.
Organizations described in section 501(c)(3) of the
Internal Revenue Code do not have to file.
Agricultural Employers.—You must file Form 940
if either of the following applies to you:

(1) You paid cash wages of $20,000 or more to
farmworkers during any calendar quarter in 1988 or
9.

(2) You employed 10 or more farmworkers during
some part of a day (whether or not at the same time)
for at least one day during any 20 different weeks in
1988 or 1989. Count aliens admitted to the United
States on a temporary basis to perform farmwork to
determine if you meet either of the above tests.
However, wages paid to these aliens are not subject
to FUTA tax before 1993.

Completing Form 940

Employers Who Are Not Required To Deposit
FUTA Tax.—If your total FUTA tax for 1989 is not
more than $100, you do not have to deposit the tax.
Make your FUTA tax payment when you file Form
940. If you do not have to deposit FUTA tax and you:
(a) made all required payments to state
unemployment funds by the due date of
Form 940,
(b) are required to make payments to the
unemployment fund of only one state, and
(c) paid wages subject to Federal
unemployment tax that are also subject to
state unemployment tax,
complete Parts | and Il or use Form 940-EZ.
Otherwise, complete Parts |, Ill, and V.

Employers Who Are Required To Deposit FUTA
Tax.—lf you meet tests (a), (b), and (c) above,
complete Parts |, II, and IV or use Form 940-EZ.
Otherwise, complete Parts |, Ill, IV, and V.

If You Are Not Liable for FUTA Tax.—If you receive
Form 940 and are not liable for FUTA tax for 1989,
write "Not Liable” across the front, sign the return,
and return it to IRS. If you will not have to file returns
in the future, write “Final’’ on the line above the
signature line and sign the return.

Due Date.—Form 940 for 1989 is due by January

31, 1990. However, if you deposited on time all tax
due, you have 10 more days to file.

Where To File.—

File with the
Internal Revenue
Service Center

your principal
business, office or
agency is located in:

Flonda, Georgia, South Carolina Atlanta, GA 39901

New Jersey, New Vork (New York City
and counties of Nassau, Rockland,
Suffolk, and Westchester)

New York (all other counties), Connecticut,
Maine, Massachusetts, New Hampshire,
Rhode Isiand, Vermont

Holtsville, NY 00501

‘Andover, MA 05501

Illinots, [owa, Minnesota, Missoun,

Wisconsin Kansas City, MO 64999

Delaware, District of Columbia,
Maryland, Pennsylvania, Puerto Rico,

Philadelphia, PA 19255,
Virginia, Virgin Islands

Indiana, Kentucky, Michigan,

Ohio, West Virgina Cincinnati, OH 45999

Kansas, New Mexico, Oklahoma, Texas Austin, 1X 73301

‘Alaska, Arizona, California (counties of
Alpine, Amador, Butte, Calaveras, Colusa,
Contra Costa, De! Norte, El Dorado, Glenn,
Humboldt, Lake, Lassen, Marin, Mendocino,
Modoc, Napa, Nevada, Placer, Plumas,
Sacramento, San Joaquin, Shasta, Sierra,
Siskiyou, Solano, Sonoma, Sutter, Tenama,
Tnnity, Yolo, and Yuba), Colorado, Idaho,
Montana, Nebraska, Nevada, North Dakota,
Osegon, South Dakota, Utah, Washington,
Wyoming

Ogden, UT 84201

California (all other counties), Hawaii Fresno, CA 93888

Alabama, Arkansas, Louisiana, Mississippi,

North Carolina, Tennessee Memphis, TN. 37501

I you have no legal residence or principal place of business in any
IRS district, file with the Internal Revenue Service Center,
Philadelphia, PA 19255,

Employer's Name, Address, and Identification
Number.—Use the preaddressed Form 940 mailed
to you. If you must use a nonpreaddressed form,
type or print your name, trade name, address, and
employer identification number on it. If you use Form
940-EZ, you may use the peel-off label sent to you on
Form 940.

See Pub. 583, Taxpayers Starting a Business, for
details on how to make tax deposits, file a return,
etc., if these are due before you receive your
number.

Identifying Your Payments. —On balance due
payments of $100 or less made to IRS (Part Il, line 3
and Part Ill, ine 6) and Federal tax deposit

payments, write your employer identification
number, “Form 940," and the tax period to which
the payment applies on your check or money order.
This will help ensure proper crediting of your
account.

Penalties and Interest.—Avoid penalties and
interest by making tax deposits when due, filing a
correct return and paying the proper amount of tax
when due. The law provides penalties for late
deposits and late filing unless you show reasonable
cause for the delay. If you file late, attach an
explanation to the return. The law also provides a
penalty of 25% of the overstatement if, without
reasonable cause, you overstate the amount you
deposited.

There are also penalties for willful failure to pay
tax, keep records, make returns, and for filing false
or fraudulent returns.

Credit for Contributions Paid Into State
Funds.—You can claim credit for amounts you pay
into a certified state (including Puerto Rico and the
Virgin Islands) unemployment fund by the due date
of Form 940.

Note: Be sure to enter your state reporting number
where required on Form 940. This number is needed
for IRS to verify your state contributions.

“Contributions” are payments that state law
requires you to make to an unemployment fund
because you are an employer. These payments are
“contributions” only to the extent that they are not
deducted or deductible from the employees’ pay.

Do not take credit for penalties, interest, or
special administrative taxes which are not
included in the contribution rate the state
assigned to you. Also do not take credit for voluntary
contributions paid to obtain a lower assigned rate.

If you have been assigned an experience rate lower
than 5.4% (.054) by a state for the whole or part of
the year, you are entitled to an additional credit. This
additional credit is equal to the difference between
actual payments and the amount you would have
been required to pay at 5.4%.

The total credit allowable may not be more than
5.4% of taxable FUTA wages.

Special Credit for Successor Employers. —If you
are claiming special credit as a successor employer,
see Code section 3302(e) or Circular E, for the
conditions you must meet.

Amended Returns.—If you are amending a
previously filed return, complete a new Form 940,
using the amounts that should have been used on
the original return, and sign the return. Attach a
statement explaining why you are filing an amended
return, Be sure to use a Form 940 for the year you
are amending. Write "AMENDED RETURN” at the
top of the form and file it with the Internal Revenue
Service Center where you filed the original return.
KS

Specific Instructions

You must answer questions A and B (check the
box in C only if it applies), complete Part I, and
sign the return.

Note: /f you have been assigned a zero percent
experience rate by your state, so that there are no
required contributions to the state unemployment
fund, check the “Yes” box in question A and write
“0% rate” on the dollar amount line.

Use Part Il only if you checked the “Yes” boxes in
questions A and B and did not check the box in C.
Otherwise, skip Part Il and complete Parts Ill and V.

Complete Part IV if your total tax for the year is
more than $100.

Box C.—Check this box ONLY if you pay any wages
that are taxable for FUTA tax but are exempt from
your state's unemployment tax.

(Instructions continued on page 4.)


: 940 Employer’s Annual Federal |_OMB No. 1545-0028 _
Department of the Treasury Unemployment (FUTA) Tax Return 1 9) 89

Internal Revenue Service > For Paperwork Reduction Act Notice, see page 2.

EMPLOYER'S

C=

A__ Did you pay all required contributions to state unemployment funds by the due date of Form 940? (See instructions if none required.) . . - L) Yes () No
Ifyou checked the “Yes” box, enter the amount of contributions paid to state unemployment funds. . . . . . oP S.

B_ Are you required to pay contributions to only one state? Fo
Ifyou checked the “Yes” box: (A) Enter the name ofthe state where you are required to pay contributions. co
(2) Enter your state reporting number(s) as shown on state unemployment tax return,

 _Ifany part of wages taxable for FUTA tax is exempt from state unemployment tax, check the box. (See the Specific Instructions on page2.). . . - . L]
mar If you checked the “Yes” boxes in both questions A and B and did not check the box in C above, you may be able to use Form 940-EZ.

Computation of Taxable Wages (to be completed by all taxpayers)
a payments (including exempt payments) during the calendar year for services ofemployees_. . . - » . | 2

2 Exempt payments. (Explain each exemption shown, attaching additional sheets if Amount paid

Necessary.) Poo ee eee ee eee eee eee eee eee eee ee eee eee eee
2
3 for services of more than $7,000. Enter only the excess over the first $7,
paid to individual employees not including exempt amounts stown on ine 2. Bo not use | ]j

the state wage limitation.
4 Total exempt payments (add lines ‘2and 3). a 4
5 _Total taxable wages (subtract line 4 from line 1). (If any partis exempt from state contributions, see instructions.) » [5
Tax Due or Refund (Complete if you checked the “Yes” boxes in both questions A and B and did not check the box in C above.)

1 Total FUTA tax. Multiply the wages in Part I, ine 5, by .008 and enter here, 1
2 Total FUTA tax deposited forthe year, including any overpayment applied from a prior year (from your records) 2
3

3 Balance due (subtract line 2 from line 1). This should be $100 or less. Pay toIRS . . >
4 Overpayment (subtract line 1 from line 2). Check if its to be: L] Applied tonext return, orl] Refunded p> | 4
Fart | Tax Due or Refund (Complete if you checked the “No” box in either question A or B or you checked the box in C above. Also complete Part V.)
1

1 Gross FUTA tax. Multiply the wages in Part |, line 5, by .062
2 Maximum credit. Multiply the wages in Part, line 5, by .054 . a
3 Credit allowable: Enter the smaller of the amount in Part V, line 11, or Part, ine2.. L3. Uh
4 Total FUTA tax (subtract line 3 from line 1). .
5 Total FUTA tax deposited for the year, including any overpayment applied fr from a prior year zr (from your records)
6 Balance due (subtract line 5 from line 4). This should be $100 or less. PaytoIRS. . . ab
7_Overpayment (subtract line 4 from line 5). Check if tis to be: C] Applied to next return, or] Refunded > | 7
Record of Quarterly Federal Tax Liability for Unemployment Tax (Do not include state liability.)

Quarter First Second Third Fourth Total for Year
Liability for quarter
Computation of Tentative Credit (Complete if you checked the “No” box in either question A or B or you checked the box in C above—see instructions.)

alata

‘Name [State reporting number(s)| Taxable payroll State ex] Contributions if | Contributions | Additionalcredit | Contributions
of | as shown on employer's | (as defined in state act) State experience rate period —_| perience |rate had been 5.4%) payable at experience | (col. 6minuscol.7) | actually paid to
state |state contribution returns 4 rate (col. 3x .054) | rate (col. 3x col. 5) |IfOorless, enter. the state
1 2 3 From— To— 5 6 7 8 9
10 Totals ss.
11 Total tentative credit (add line 10, columns 8 and 9 only—see instructions for limitations)... i
Ifyou will not have to file returns in the future, write “Final” here (see general instruction “Who Must File’ rand sign the return. >

Under penaities of perjury, I declare that | have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, its true, correct, and
complete, and that no part of any payment made to a state unemployment fund claimed as a credit was or 1s to be deducted from the payments to employees,

Signature > Title (Owner, etc.) Date >

Note: You must keep this copy and a copy of each related schedule or statement for 4 years after the date the tax is due or paid, whichever is later.
These copies must be available for inspection by the IRS. See Circular E and Pub. 937, Business Reporting, for more information. Household
employers should see Pub. 926.