Form 940 is used to calculate a business’ annual FUTA (Federal Unemployment Tax Act) tax. The money from this is used towards paying unemployment compensation for employees that have lost their jobs. Because this is a business tax, it will not be deducted from employee’s payroll.
You are generally eligible to file this form if the following two requirements are met:
- Your business paid over $1,500 to employees in any given calendar quarter
- Your business had one or more employees working in some capacity for at least 20 weeks of the year
inDinero does not handle payroll, so while your team is happy to help you understand some of the broader tax implications associated with this form, your team will generally refer you to whoever handles your payroll.
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