Form-940 | Meaning and Definition

What is form 940? 

It is an employer’s report form available on the IRS. The employer must file this form to pay and report their taxes on federal unemployment. The taxes on the federal unemployment need not be deducted from the employees’ pay. But the same has to be paid and reported in form 940 of the IRS. 

Need to file Form 940: 

  • If an employee has worked for 20 weeks or more than 20 weeks in a year
  • During the standard calendar year, if any employee has been paid a sum of $1500 or more
  • The employees working in a company but haven’t been paid the amount of money that has to be paid

The dues on the unemployment tax must be calculated. Then a comparison has to be done against the employer’s liability and the already paid tax with the help of form 940 available on the IRS. If anyone has not paid the unemployment taxes, that needs to be paid to the IRS.

Method to file Form 940:

The employers can file this form available on the IRS online with the help of a third party. The IRS provides facilities for information submitted on authorized e-file folders that employers can select to file their taxes on business. Employers wishing to file form 940 with the help of a third-party system have to pay some additional amount to file for services.

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