General Instructions

Additional instructions for withholding,
depositing, paying, and reporting Federal
income tax, social security taxes, and Fed-
eral unemployment tax, are contained in
Circular E, Employer's Tax Guide, available
free from any Internal Revenue Service
office.

Refer to Circular E to find which employ-
ers must file Form 940, the types of pay-
ments defined by law as wages, and the kind
of services covered by the Federal Unem-
ployment Tax Act.

Purpose of Form 940.—This form is for
the annual reporting of tax under the Federal
Unemployment Tax Act. Federal unemploy-
ment tax is paid by the employer. It is not de-
ductible from wages paid employees. The tax
rate is 3.2 percent on the first $4,200 of
wages paid to each employee during 1974
and 1975.

Who Must File.—Every employer who dur-
ing the current or preceding calendar year
paid wages of $1,500 or more in any calen-
dar quarter, or at any time had ONE or more
employees in any 20 calendar weeks must
file Form 940. Count all regular, temporary,
and part-time employees. A partnership
should not count its partners. If there is a
change of ownership or other transfer of the
business during the year, each employer who
during the current or preceding calendar
year paid wages of $1,500 or more in a
calendar quarter, or had ONE or more em-
ployees at any time in each of 20 calendar
weeks, must file Form 940, but neither
should report wages paid by the other.

If you receive a pre-addressed form and
are not liable for Federal unemployment tax
for 1974, write “Not Liable” across the front
of the form and return it to the Internal Rev-
enue Service. If you are no longer in busi-
ness at the end of a year, write “Final” in
line 24.

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.

Once you have filed a Form 940, the Serv-
ice will send you a pre-addressed form near
the close of each calendar year. If you do not
receive a form, request one from any Internal
Revenue Service office in time to file when
due.

Due Date of Return.—Form 940 for cal-
endar year 1974 is due on or before January
31, 1975. However, if you made timely de-
posits in full payment of the tax due for the
year, you may file the return on or before
February 10, 1975.

Where to File.

If your principal busi-
ness, office, or agency
is located in Use this address

v wv

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

New York (all other coun-
Hes), Connecticut, Maine,

Internal Revenue Service Center
1040 Waverly Ave
Holtsvilte, New York 11799

Internal Revenue Service Center
310 Lowell Street
‘Andover, Massachusetts 01812

Massachus

Hampshire, Rhode”

Island, Vermont

District of Colum! Internal Revenue Service Center
Delaware, Marylai 1601 Roosevelt Boulevard

Pennsylvania Padelphia, Pennsylvania

Page 4

a Revenue Service Center

‘Alabama, Florida, Intern
4800 Buford Hig!

Georgia, Mississippi,

South Carolina Chamblee, Georgia 30006
Michigan, Ohio Internal Revenue Service Center

Cincinnati, Ohio 45298
‘Milansas. Kansas,

New Mexico,
Otlahoms, Texas

‘Alaska, Arizona, Colo;

Internal Revenue Servi

jo, Idaho, Minnesota, 1160 West 1200 South St.
Honan Nebraska, Ogden, Utah 84201
North Dakota, Ore-

one South Dakota, Utah,
fashington, Wyoming
Tlinois, Towa, Missouri,
Wisconsin

Internal Revenue Service Center
2306 E. Bannister Roa

Kansas City, Missouri 64170
Internal Revenue Service Center
3045 East Butler Avenue
Fresno, 93888
Internal Reven
3131 Democrat Road
Memphis, Tennessee 38110

California, Haw

If you have no legal residence or principal
place of business in any Internal Revenue
Service district, or if your principal place of
business is in Puerto Rico, file Form 940
with the Internal Revenue Service Center,
11601 Roosevelt Boulevard, Philadelphia,
Pa, 19155.

Deposit Requirements.—You must de-
posit Federal unemployment tax in an
authorized commercial bank or a Federal
Reserve bank. Include Federal Tax Deposit
Form 508 with each deposit.

You must compute Federal unemployment
tax on a quarterly basis. Deposit any amount
due on or before 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 quarter, your deposit require-
ments do not begin until the end of the sec-
ond or third quarter, respectively.)

To determine whether you must make a
deposit for any of the first three quarters in
1975, compute the total tax by multiplying
by .005 that part of the first $4,200 of each
of your employee’s annual wages you paid
during the quarter.

If the amount subject to deposit (plus the
amount subject to deposit for any prior quar-
ter but not deposited) is more than $100,
deposit it during the first 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, you must deposit the entire amount.
If your tax for the year (less any deposits) is
$100 or less, you may either deposit the tax
or send payment with Form 940.

If you deposited the proper amounts in
accordance with these rules, the balance due
on line 23 will not exceed $100.

How to Make Deposits.—Fill in a prein-
scribed Federal Tax Deposit Form 508 in
accordance with its instructions.

Send the Federal tax deposit form and
your tax deposit to any commercial bank de-
pository or Federal Reserve bank. Make your
check or money order payable to that bank.

The timeliness of deposits is determined
by the date the commercial bank depository
or Federal Reserve bank receives them. A
deposit received after the due date will be
considered timely if you establish that you
mailed it two or more days before the due
date.

Employer's Name, Address, and Identifi-
cation Number.—Use the pre-addressed

‘r US, GOVERNMENT PRINTING OFFICE : 1914-—-O-548-030 36-2603-697

Form 940 mailed to you. If you must use one
not pre-addressed, 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,

Credit for Contributions Paid into State
Funds.—You are entitled to a credit against
your Federal unemployment tax for contri-
butions you pay into a certified State un-
employment compensation fund on or before
the due date of Form 940.

The term ‘‘contributions” means pay-
ments required by a State law to be made
into an unemployment fund by any person
on account of having individuals in his em-
ploy, to the extent that such payments are
made by him without being deducted or de-
ductible from the remuneration of indivi
uals in his employ.

You may credit contributions against the
tax whether or not you paid them with re-
spect to “employment.” You may not take
credit for voluntary contributions or for pen-
alties or interest you pay 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 if
you had paid the contributions on or before
the due date.

Employers who have been granted an
experience rate lower than 2.7 percent by a
State for the whole or part of the year are
entitled to an “additional credit.” This 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.

Section 3302(e) of the Code provides a
special credit if an employer during any cal-
endar year acquires substantially all of the
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”
and immediately after the acquisition the
successor employs in his trade or business
one or more individuals who immediately
prior to the acquisition were employed in
the trade or business of the predecessor.
This special credit is not allowable to any
successor employer whose predecessor also
is an “employer,” nor is it allowable to a
corporation acquiring the trade or business
of another corporation in a statutory merger
or consolidation. The amount of the special
credit is based on the amount of remunera-
tion, subject to the unemployment compen-
sation law of a State, paid by the predeces-
sor 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 allowable under Section
3302 may not exceed 2.7 percent of taxable
wages.



com, 940 resuy Employer's Annual Federal Unemployment Tax Return

Internal Revenue Service

1974

‘State reporting number Experience rate period | Experi- | Contributions had | Contributions pay.
Name of State | as shown on employer's Taxable. payroll 4 ence | rate been 2.7% | able at experience rate
State contribution returns| (AS seine’ State act) |______~_____| rate | (col. 3 z 2.7%) | (col. 3 % col. 5)
2

‘Additional Contributions
credit actually paid
(col. 6 minus col. 7)! to State

VM ll

10
11

Total tentative credit (Column 8 plus column 9). :
Total remuneration (including exempt remuneration) PAID during the calendar year for services of employees

number of

Exempt Remuneration involved ‘Amount paid

12

13

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

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)

14 Total exempt remuneration... Co
15 Total taxable wages (line 11 less line 1) So ee __
16 Enter 2.7% of the amount of wages shown on line15. . © - 6 ee ee ee ee ___
17 Gross Federal tax (3.2% ofline15) 2. 2. we ee
18 Line 10 or line 16 whichever is smaller. . . oe
19 Amount, if any, of wages on line 15 attributable to the * state of
Connecticut >. -x 003... 0.2.0.0 0b
20 Credit allowable (line 18 less line 19). © 2. 2 ew ee ee es
21 _Net Federal tax (line 17 less line 20). _. re
Record of Federal Tax Deposits
Quarter Liability by period Date of deposit Amount of deposit
First
Second
Third
Fourth
22 Total Federal tax deposited. ©. © 2 ee 8 ee ee ee ee ee en
23 Balance due (line 21 less line 22). Pay to “Internal Revenue Service” . . . . . . . 1 + 1 PD
24 If no longer in business at end of year, write “FINAL” here D>

Under penalties of perjury, | declare that 1 have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief

correct, and

true,
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.

Dato > Signature p> Title (Owner, ete.) p>
T |___.
FF
FD
FP
7 Hi
(it incorrect Name (as distinguished from trade name) Calendar Year 7 —
make any 1974
necessary Trade name, if any Identification No.
change.)

Address and ZIP code

Form 940 (1974)


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
higher than 2.7 percent, use columns 1,
2, 3, 4, 5, and 9 only.

Ifa 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.—Section 3302(b) of the
Code requires an employer with an experi-
ence rate to determine the amount of con-
tributions he would have had to pay if
throughout the taxable year he had been
subject to the highest rate applied by the
State or to a rate of 2.7 percent, whichever
is lower. For this return, 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 to compute the
amount shown in column 6. If the highest
rate of contributions is less than 2.7 per-
cent in the State, then multiply column 3
by the highest rate applicable for the State
and enter the result on the appropriate
line in column 6.

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

Line 19.—Enter in the first space on
line 19 the amount (if any) of wages, as
defined in the Federal Unemployment Tax
Act, paid in 1974 which are subject to the
unemployment compensation law of Con-
necticut or which are otherwise attributable

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.

Page 2

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

to Connecticut. (If in doubt, ask you local
Internal Revenue Service office.) Such
amount, multiplied by .003, is a credit re-
duction required by Internal Revenue Code
section 3302(c)(3). If there were no wages
paid attributable to Connecticut, enter
“none”’ or “‘0"' on line 19.

Special Credit—Ilf 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.

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

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


rom 940

Department of the Treasury , Employer's Annual Federal Unemployment Tax Return

1974

Internal Revenue Service
State reporting number “Experience rate period
Name of State | as shown on employer's | .__ Taxable, payroll 40°
State contribution returns} in State act)

Experi- | Contributions had] C
ence | rate been 2.7% | abl
col. 3 Fs 2.7%) | (cs

rate

‘butions pay-

perience rate

3X col. 5)
7

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

Totals > WU WL.

10 Total tentative credit (Column 8 plus column 9).

11_Total remuneration (including exempt remuneration) PAID during the calendar year for services of employees

Exempt Remuneration

Approximate number of

‘employees involved Amount paid

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

first $4,200 paid to individual employees exclusive of exempt
amounts entered on line 12) .

14 Total exempt remuneration...

15 Total taxable wages (line 11 less line 14) .

16 Enter 2.7% of the amount of wages shown on line 15. a
17 Gross Federal tax (3.2% ofline15) . . 2... ee ee
18 Line 10 or line 16 whichever is smaller .

19 Amount, if any, of wages on line 15 attributable to the state of

Connecticut . x 003
20 Credit allowable (line 18 less line 19) .

21_Net Federal tax (line 17 less line 20)

Sl

Record a of Federal Tax Deposits

Quarter Liability by period Date of deposit

‘Amount of deposit

First

Second

Third

Fourth

22 Total Federal tax deposited.

23 Balance due (line 21 less line 22). Pay to “Internal Revenue Service”

|

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

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

1974

Identification No.