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Prepare forms 940, 941, 943, 944, and 945

How line 10 of Form 940 is calculated

The instructions for Line 10 on the 940 state: "If SOME of the taxable FUTA wages you paid were excluded from state unemployment tax, OR you paid ANY state unemployment tax late (after the due date for filing Form 940), complete the worksheet in the instructions. enter the amount from line 7 of the worksheet."
note
Before you begin, confirm the UI Rate is correct for the client on the Payroll Taxes tab on the Clients screen. Select the ellipsis button for the UI rate field to review the history of UI rate changes. If the rate is missing for the 940 processing year, the application considers the rate to be 0% and you should add the correct rate.
The application assumes all SUTA payments were made on time. If any SUTA payments were paid late (after the 940 filing deadline), complete the Line 10 worksheet and override the amount on Line 10.

IRS worksheet for line 10

Before you can fill out the worksheet, you'll need to gather the following information:
  • Taxable FUTA wages (Form 940, line 7)
  • Taxable state unemployment wages (state and federal wage bases may differ)
  • The experience rates assigned to you by the states where you paid wages.
  • The amounts of state unemployment taxes you paid on time ("on time" means that you paid the state unemployment taxes by the due date for filing Form 940). Include any state unemployment taxes you paid on nonemployees who were treated as employees by your state unemployment agency.
  • The amount of state unemployment taxes you paid late ("late" means after the due date for filing Form 940).
tip
You can run the Payroll Tax Summary - Condensed report to find the taxable state unemployment wages.

Calculations

If all SUTA payments were made on time, the application will automatically calculate line 9 or line 10.
Line 9: If all FUTA taxable wages were excluded from SUTA taxable wages, then Line 7 (total FUTA taxable wages) x 0.054 = Line 9
Line 10: If some FUTA taxable wages were excluded from SUTA taxable wages
  • Maximum FUTA credit = FUTA taxable wages (line 7) x 0.054
  • Maximum SUTA credit = SUTA taxable wages x 0.054
If the difference between the maximum FUTA credit and the maximum SUTA credit is positive, the result goes on Line 10.
Example
Assume your client paid $39,000.00 in FUTA taxable wages but only $34,500.00 in SUTA taxable wages and all SUTA payments were made on time.
  • The maximum FUTA credit would be 39,000 x 0.054 = 2,106.00
  • The maximum SUTA credit would be 34,500 x 0.054 = 1,863.00
Since the difference between the maximum FUTA credit and the maximum SUTA credit is positive (243.00), the result will be added to Line 10.

This article applies to:

  • Product: Accounting CS
  • Subject: Payroll tax forms

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