IRS Releases 2022 Form 940, Schedule A
The IRS has released the 2022 Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, Schedule A (Form 940), Multi-State Employer and Credit Reduction Information, and the Instructions for Form 940.
Four States and Virgin Islands Subject to FUTA Credit Reduction
California, Connecticut, Illinois, and New York, along with the Virgin Islands, did not pay back their federal loans by the November 10, 2022, deadline and will lose the full Federal Unemployment Tax Act (FUTA) credit for 2022. For 2022, California, Connecticut, Illinois, and New York are subject to a FUTA credit reduction of 0.3%, and the Virgin Islands is subject to a FUTA credit reduction of 3.6%.
Form 940, Schedule A Reflects Credit Reductions
The additional FUTA tax must be deposited by the due date of the 2022 federal Form 940, which is January 31, 2023. The 2022 Schedule A contains the official list of credit reduction states, and the credit reduction total from Schedule A is reported on Form 940.
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Curtis E. Tatum, Esq., is In-House Counsel and Director of Federal Payroll Compliance for the APA.