Do I have to file Form 940?
According to the IRS, you must file this form if:

• You paid employees $1,500 or more in any quarter during 2010 or 2011, or
• You have one or more employees on your payroll for a part of the day in 20 or more separate weeks in 2010 or 2011.

For more information about other groups that must file Form 940, refer to page 2 of the 2011 Instructions for Form 940.

Where can I find the 2011 Form 940?
You can find the 940 form on the IRS website.

How do I fill out the 940?
You will need the following info:

• Your EIN and business contact info
• Total payments to all employees

You can type your information directly into the 940 form, which is a PDF format, and print it out. You can also print it out first and type your information using 12-point Courier font. Refer to the 940 instructions for more help.

Where do I send the completed 940?
That depends on your state, and whether you will be sending a payment. For the list of IRS addresses, consult page 2 of the 940 instructions. You can also file and pay online. Visit IRS.gov for more information.

When is the 940 for 2011 due?
The 940 form for 2011 is due Jan. 31, 2012. However, if you paid all FUTA tax when it was due, your filing deadline is Feb. 10, 2012. (For more deadlines, download our free calendar, "Important Tax Dates for 2012.”)

What is the FUTA tax rate?
For the first half of the year, employers paid 6.2% (.062) tax on the first $7,000 paid to each employee for the calendar year. After June 30, a FUTA surtax rate expired, dropping the rate to 6.0% (.060).

Employers also get a credit for amounts they pay for state (SUTA) unemployment tax. However, many states have borrowed unemployment funds from the federal program and have not repaid their debt. In those states, the credit has been reduced.

What are FUTA credit reduction states?
Employers receive a FUTA credit for amounts they pay into the state fund. However, in the last few years, certain states hit hard by unemployment have borrowed money from the federal fund to pay benefits to unemployed workers in their state. Those states include: Arkansas, California, Connecticut, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Minnesota, Missouri, North Carolina, New Jersey, Nevada, New York, Ohio, Pennsylvania, Rhode Island, Virginia, Wisconsin, and the U.S. Virgin Islands.

If you were required to pay state unemployment tax in any of these states, you must fill out Schedule A (Form 940) for 2011, and may be subject to a FUTA credit reduction (meaning more tax may be due.)