Highlights
Effective January 1, 1978—
(1) Wage base increases to $6,000;

(2) Coverage extended to certain agricultural
and domestic service employees (see “Who Must
File” below); and,

(3) U.S. Virgin Islands employers are subject
to FUTA.

General Instructions

For more detailed information on which
employers must file, the types of payments
defined by law as wages, and the kind of
services covered by the Federal Unemploy-
ment Tax Act (FUTA), see Circular E, Em-
ployer’s Tax Guide, available at any Internal
Revenue Service office.

Purpose of Form 940.—Use it for the an-
nual reporting of tax under FUTA, which is
PAID ONLY BY THE EMPLOYER. The tax rate
is 3.4 percent on the first $4,200 of wages
paid to each employee during 1977.

Who Must File.—In general, every em-
ployer who during the current or preceding
calendar year paid wages of $1,500 in any
calendar quarter, or at any time had ONE or
more employees in any 20 calendar weeks
must file. Count all regular, temporary, and
part-time employees. A partnership should
not count its partners. If a change of owner-
ship or other transfer of the business occurs
during the year, each employer who meets
the $1,500 a quarter or one or more em-
ployees in 20 weeks tests must file, but
neither should report wages paid by the
other. Organizations described in section
501(c)(3) are not required to file.

Generally, beginning in 1978, employers
who (1) paid cash wages of $20,000 or more
to agricultural workers during any calendar
quarter in the current or preceding year;
or (2) employed 10 or more agricultural
workers during some portion of a day
(whether or not at the same time) for at
least one day during any 20 different weeks
in the current or preceding calendar year
(Aliens admitted to the U.S. on a temporary
basis to perform agricultural labor are ex-
cluded until January 1, 1980.); or (3) paid
cash wages of $1,000 or more in any cal-
endar quarter in the current or preceding
year for domestic service in a private home,
local college club, or a local chapter of a
college fraternity or sorority will be required
to file Form 940.

If you receive a form and are not liable for
Federal unemployment tax for 1977, write
“Not Liable” across the front and return it
to the IRS. If you are no longer in business
at the end of the year, write “Final” in line

If you sold or transferred the business
during the year, attach a statement showing
the name, address, and employer identifica-
tion number (if known) of the new owner.

Page 4

Once you have filed a Form 940, we will
send you a preaddressed form near the end
of the year. If you do not receive it, request
one from any IRS office in time to file.

Due Date.—Form 940 for 1977 is due by
January 31, 1978. If you made timely de-
posits ‘in full payment of the tax due, you
have until February 10, 1978 to file.

Where to File.

Hf your principal busi-
ness, office, or agency
is located in

Vv

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

New York (all other coun-
ties), Connecticut, Maine,
Massachusetts, New
Hampshire, Rhode
Island, Vermont

District of Columbia,
Delaware, Maryland,

Holtsville, NY 00501

‘Andover, MA 05501

Philadelphia, PA 19255

Pennsylvania
Alabama, Florida,
Georgia, Mississippi, Atlanta, GA 31101
South Carolina

Ohio Cincinnati, OH 45999

Austin, TX 73301

Mont:

vada, N

gon, South Dakota, Utah,
fashington, Wyoming

Ogden, UT 84201

illinois, lowa, Missouri,
Wisconsin

Kansas Cit 64999
Fresno, CA 93888

Kentucky, North
ne

fennessee, Memphis, TN 37501
West Virginia

Carol
Virgini

If you have no legal residence or principal pla
of business in any Internal Revenue Service di
trict, or if your principal place of business is
Puerto Rico, file Form 940 with the Internal Rev-
enue Service Center, Philadelphia, PA 19255.

Deposit Requirements.—Deposit Federal
unemployment tax in an authorized commer-
cial bank or Federal Reserve bank in accord-
ance with instructions on the reverse of a
preinscribed Federal Tax Deposit Form 508
which must accompany each deposit.

Figure Federal unemployment tax on a
quarterly basis. Deposit any amount due by
the last day of the first month following the
close of the quarter. (If you do not qualify as
an employer until the second or third quar-
ter, your deposit requirements do not begin
until then.)

To determine if you must make a deposit
for any of the first three quarters in 1978,
compute the total tax by multiplying by .007
that part of the first $6,000 of each employ-
fe's annual wages you paid during the quar-

er.

If the amount subject to deposit (plus the
undeposited amount for any prior quarter) is
more than $100, deposit it during the first

‘Yr US, GOVERNMENT PRINTING OFFICE : 1977—O-235-040

month following the quarter. If the amount
is $100 or less, you do not have to deposit
it, but you must add it to the amount subject
to deposit for the next quarter.

If the tax reportable on Form 940 less
amounts deposited for the year is more than
$100, deposit the entire amount. If the tax
for the year less any deposits is $100 or
less, either deposit it or pay it with Form
940.

If you deposited the proper amounts, fol-
lowing these rules, the balance due on line
23 will not exceed $100.

How to Make Deposits.—Follow the in-
structions on the reverse of the preinscribed
Federal Tax Deposit Form 508.

Employer’s Name, Address, and Identifica-
tion Number.—Use the preaddressed Form
940 mailed to you. If you must use a non-
preaddressed form, type or print your name,
trade name, address, and employer identifi-
cation number on it.

Penalties and Interest.—Avoid penalties
and interest by filing a correct return and
paying the proper amount of tax when due.
The law provides a penalty for late filing
unless you show reasonable cause for the
delay. If you file late, attach an explanation.

There are also penalties for willful failure
to pay tax, keep records and make returns,
and for filing false or fraudulent returns. Tax-
payers who willfully claim credit on the rec-
ord of Federal tax deposits or on line 22 for
deposits not made are subject to fine and/or
other criminal penalties.

Credit for Contributions Paid into State
Funds.—You can claim credit for contribu-
tions you pay into a certified State unem-
ployment compensation fund by the due date
of Form 940.

“Contributions” mean payments required
by State law to be made into an unemploy-
ment fund by any person on account of hav-
ing individuals in his or her employ, to the
extent that such payments are made without
being deducted or deductible from the em-
ployees’ remuneration.

You may credit contributions against the
tax whether or not made with respect to
“employment.” You may not take credit for
voluntary contributions or for penalties or
interest payments to a State.

Credit for contributions you make after
the due date (or extended due date) for filing
Form 940 may not exceed 90 percent of the
amount that would have been allowable had
you paid the contributions by the due date.

Employers who have been granted an ex-
perience rate lower than 2.7 percent by a
State for the whole or part of the year are
entitled to an “additional credit,” which is
equal to the difference between actual con-
tributions and the amount they would have
been required to contribute at (1) the high-
est rate applied by the State, or (2) 2.7 per-
cent, whichever is lower.

The total credit allowable may not exceed
2.7 percent of taxable wages.

235-040-2


rom 940 — Employer’s Annual Federal Unemployment Tax Return 1977

Internal Revenue Se

N f Stat Stat ate reporting number Taxable payroll Experience rate period Experi- Contributions had Gantriutions py Additional Contributions
lame of State | as shown on employer's a a) ence | rate been able at experience rat credit actual ai
State contribution returns} (AS defined in State act)/_—_______“r____) rate | (coh, 3°3¢ 2.7%)| | (col. 3. c0l- 5) |(col. 6 minus col. 7)] “to State
2 3 To— 5 6 8

Totals > AMMA AA

10 Total tentative credit (Column 8 plus column 9). . 2. 1. 6 ee ee ee ee
11 Total remuneration (including exempt remuneration) PAID during the calendar year for services of employees

i Approximate number of ,
Exempt Remuneration Penptoyees weer ‘Amount paid

12 Exempt remuneration. (Explain each exemption shown, attaching
additional sheet if necessary):__

13 Remuneration in excess of $4,200. Enter only the excess over the first
$4,200 paid to individual employees exclusive of exempt amounts
entered on line 12. Do not use State wage limitation. . . . .

14 Total exempt remuneration (line 12 plus line 13)... . we ee ee ee
15 Total taxable wages (line lllessline14) . 6 6 6 1 we ee ee ee ee ee
16 Gross Federal tax (3.4% of line 15). . . . a

17 Enter 2.7% of the amount of wages shown on line 18. Soe ee eee 7/

18 Line 10 or line 17 whichever is smaller. . 6 1 1 1 es ee ee

19 Amount, if any, of wages on line 15 attributable to the following:
(a) District of Columbia $.... we X 003.
(b) New Hampshire $. x 0045. .L J
(c) Total (add lines 19(a) and (b)). 2 we ee ee ee e D UY,

20 Credit allowable (line 18 less line 19(c)). 2 6 6 ee ee ee ee ee ee
21 Net Federal tax (line 16 less line 20) .

Record of Federal Tax Deposits for “Unemployment Tax (Form 508) 7
Quarter Liability by period Date of deposit Amount of deposit
First
Second
Third
Fourth Ui,
22 Total Federal tax deposited. . . . . : : : : : co ee eee

23 Balance due (line 21 less line 22—this should not exceed $100). Pay to “Internal Revenue Service”. |
24 Overpayment (line 22 less line21). . . . - ee ee ee ee

25 If no longer in business at end of year, write “FINAL” here >

Under penalties of periuny, declare that | have examined this return, including accompanying schedules and statements, and to the best af my knowledge and belil itis true, carect, and
complete, and that no part of any payment made to a State unemployment fund, which is claimed as a credit on line 20 above, was or is to be deducted from the remuneration of employees.

Date > Signature b> Title (Owner, ete.) >
T
FF
FD.
FP
7d 1
Name (as distinguished from trade name) Calendar Year
(If incorrect, 1977 +
make ai i
necessary Trade name, if any Employer Identification No.
change.)

‘Address and ZIP code

L

235-040-1 Form 940 «1977


Computation of Credit Against Federal Unemployment Tax

Experience Rate.—If a State has grant-
ed you an experience rate lower than
2.7 percent for all or part of the taxable
year, use columns 1 through 9. If you
have not been granted an experience rate,
use columns 1, 2, 3, and 9 only. If you
have been granted an experience rate
of 2.7 percent or higher, use columns 1,
2, 3, 4, 5, and 9 only.

If a State has granted you an experience
rate on part of your payroll, enter sep-
arately in columns 1, 2, 3, and 9, that part
to which the experience rate does not
apply.

If you were granted an experience rate
for only part of the year or your experience
rate was changed during the year, show
in the appropriate columns the period to
which each separate rate applied, your
payroll, rate of contributions, and required
contributions for each period.

Column 1.—Enter the name of the
State or States (including Puerto Rico) to
which you were required to pay contribu-
tions.

Column 2.—Enter your State reporting
number as shown on your State contribu-
tion return. If you had a place of employ-
ment in more than one State, enter the
reporting number assigned to you by each
State.

Column 3.—Enter the taxable payroll
on which you must pay contributions to the
unemployment fund of the State shown in
column 1. If you have been granted an
experience rate of zero, enter the amount

‘on which you would have had to make con-
tributions if that rate had not been granted.

Column 4.—Enter the period(s) of the
year to which the experience rate(s)
applies.

Column 5.—Enter the experience
rate(s) the State(s) granted you for the
period(s) shown in column 4.

Column 6.—Multiply the payroll in col-
umn 3 by 2.7 percent and enter the result
in column 6,

Column 7.—Multiply the payroll in col-
umn 3 by the “experience rate” in column
5, and enter the result in column 7.

Column 8.—Subtract the amount in col-
umn 7 from the amount in column 6 and
enter the result in column 8. If zero or less,
enter zero (0).

Column 9.—Enter in column 9 the
amount of contributions actually paid into
the State fund.

Line 10.—Enter the sum of columns 8
and 9. Also include any special credit as
explained below.

Line 19.—Enter in the appropriate
line the amount (if any) of wages, as de-
fined in the Federal Unemployment Tax
Act, paid in 1977 which are subiect to the
unemployment compensation laws of the
District of Columbia or New Hampshire or
are otherwise attributable to those States.
(If in doubt, ask your local Internal Rev-
enue Service office.) Such amount for the
District of Columbia, multiplied by .003, is
a credit reduction required by Internal Rev-

Computation of Taxable Wages

Line 11.—Total remuneration (includ-
ing exempt remuneration) PAID during the
calendar year for services of employees.—
Enter on line 11 the total remuneration for
services you paid employees during the
calendar year, regardless of whether that
remuneration is taxable. It should include
salaries, wages, commissions, fees, bo-
nuses, vacation allowances, salaries and
wages paid to temporary or part-time em-
ployees, 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 on which you pay the remu-
neration is immaterial in determining
whether it constitutes wages. Thus, you
may pay it on the basis of piecework or a
percentage of profits, and you may pay it
hourly, daily, weekly, monthly, or annually.

You may pay the remuneration in cash
or in some other medium, such as goods,

Page 2

lodging, food or clothing. Compute re-
muneration paid in items other than cash
on the basis of the fair value of the items
at time of payment.

Exempt Remuneration.—The terms
“wages” and “employment” as defined
for Federal unemployment tax purposes
do not include every payment of remu-
neration to an employee and every kind
of service which an employee may per-
form. In general, any remuneration which
is excluded from ‘‘wages’’ and any re-
muneration for services which are ex-
cepted from “employment,” are not in-
cluded in the total wages subject to the
tax. These remuneration payments may
be deducted from the total remunera-
tion paid only if they are identified on
line 12.

Line 12.—Enter on line 12 such items
as (1) agricultural labor, (2) benefit pay-

enue Code section 3302(c)(2). Such
amount for New Hampshire, multiplied by
.0045, is a credit reduction required by
Code section 3302(c)(3). If there were no
wages paid attributable to these States,
enter “none” or “0” in the appropriate
spaces on line 19.

Special Credit—If you are claiming
special credit as a successor employer,
attach a statement showing (a) the name,
address, and employer identification num-
ber of your predecessor, (b) how you ac-
quired your predecessor’s trade or busi-
ness (or a separate unit of it), (c) the date
you acquired it, (d) each item in columns
1 through 9 that applies to your predeces-
sor, (e) the number of individuals your
predecessor employed immediately before
the acquisition, whom you also employed
immediately after the acquisition, (f) the
total remuneration subject to State unem-
ployment compensation your predecessor
paid to the employees in (e) above during
the calendar year.

The amount of the special credit is de-
termined by (1) adding the ‘‘Additional
Credit” and ‘‘Contributions actually paid
to the State’ determined for your prede-
cessor in step (d) above, and (2) multiply-
ing this total by a fraction of which the
numerator is the amount determined in
step (f) above, and the denominator is the
“Taxable Payroll (as defined in State Act)”
paid to all individuals in the employ of your
predecessor prior to your acquisition dur-
ing the calendar year.

ments for sickness or injury, under a
workmen’s compensation law, insurance
plan and certain employer plans, (3) do-
mestic service, (4) family employment, (5)
certain fishing activities, and (6) any other
exempt payments or services. For more
detailed information with respect to these
exemptions, see Circular E, Employer's Tax
Guide.

Line 13.—Enter on line 13 the approxi-
mate number of employees to whom you
paid more than $4,200 during the year
and the aggregate amount of the excess
above $4,200 paid to all of those em-
ployees. 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 on line 11 and $8,000
on line 13. The $4,200 wage limitation for
1977 is for Federal unemployment tax pur-
poses only. Do not use the State wage limi-
tation for this entry.

(For General Instructions, see back of your copy.)

235-040-1


Form 940

Department of the Treasury
Internal Revenue Service

Employer’s Annual Federal Unemployment Tax Return

1977

y of Stat State reporting pumber Taxable payroll Experience rate period Experi- Contetbutions ad Gontributions Lae
lame of State | as shown on employer's ence een 2.7% | ableat experience rat
tate contribution returns| (AS defined in State act) rate | (col. 3 x 2.7%)} (col. 3 x col. 5)
2 3 From— To— 5 6 7

Additional Contributions
credit actually paid
(col. 6 minus col. 7)| to State
8 9

MAU

Totals > WMA WMA

10 Total tentative credit (Column 8 plus column 9). . . oe . . . ee ew ee
11 Total remuneration (including exempt remuneration) PAID during. the calendar year for services of employees

Approximate number of

Exempt Remuneration ‘employees involved

‘Amount paid

12 Exempt remuneration. (Explain each exemption shown, attaching
additional sheet if necessary): _

13 Remuneration in excess of $4,200. Enter only the excess over the first
$4,200 paid to individual employees exclusive of exempt amounts
entered on line 12. Do not use State wage limitation . woe

Total exempt remuneration (line 12 plus line 13) .

14

15
16
17
18
19

Total taxable wages (line 11 less line 14) .
Gross Federal tax (3.4% of line 15) .

Enter 2.7% of the amount of wages shown on line 15 .
Line 10 or line 17 whichever is smaller . .
Amount, if any, of wages on line 15 attributable to the followin,
(a) District of Columbia $.... -- X  .003.
(b) New Hampshire $.... -- X 0045,
(c) Total (add lines 19(a) and (b)). rr

Credit allowable (line 18 less line 19(c)) .
Net Federal tax (line 16 less line 20) .

20
21

Ls

Form 508) ~

‘Amount of deposit

Record of Federal Tax Deposits for Unemployment Tax (
Liability by period Date of deposit

Quarter
First
Second
Third
Fourth
Total Federal tax deposited. . 2. 2. 1 1 ew ee eee

Balance due (line 21 less line 22—this should not exceed $100). Pay to “Internal ‘Revenue Service’
Overpayment (line 22 less line 21)... — +e ee

22
23
24

Ua

25 If _no longer in business at end of year, write “FINAL” here >

Keep This Copy For Your Records

You must retain this copy, and a copy of each related schedule or statement for a period of 4 years after the date the tax is due or

paid, whichever is the later. These copies must be available for inspection by the Internal Revenue Service.

YOUR COPY

Calendar Year
1977

Employer Identification No.

Note: Be sure the State unemployment compensation agency has your correct Federal Employer Identification Number to insure

that you receive credit for your State contributions.

235-040-1