What IRS Form 940 (2022) Is For

Form 940 is the Employer's Annual Federal Unemployment (FUTA) Tax Return that reports your annual federal unemployment tax (IRS Instructions for Form 940 (2022)). You must file this form if you paid wages of $1,500 or more in any calendar quarter during 2021 or 2022, or had one or more employees for at least some part of a day in any 20 or more different weeks in 2021 or 2022. The FUTA tax funds unemployment compensation for workers who have lost their jobs and applies to the first $7,000 you pay to each employee during the calendar year.

When You'd Use Form 940 for 2022 (Late or Amended Filing)

You would file a late 2022 Form 940 if you missed the original January 31, 2023 deadline (or February 10, 2023 if you deposited all FUTA tax when due). Common scenarios include receiving IRS notices for unfiled returns, discovering you owe additional FUTA tax after an audit, or realizing you should have filed when you previously thought you were exempt. For amended returns, you'd file if you discovered errors in wages reported, tax calculations, or state credits claimed on your original 2022 return. Note that for refunds, you generally have three years from the original due date to claim them, meaning 2022 refund claims must typically be filed by January 31, 2026.

Key Rules Specific to 2022

The 2022 tax year had several important FUTA considerations. Five jurisdictions faced credit reduction: California, Connecticut, Illinois, New York, and the U.S. Virgin Islands, meaning employers in these areas paid higher FUTA tax rates (IRS.gov/businesses/small-businesses-self-employed/futa-credit-reduction). The standard FUTA tax rate remained 6.0% on the first $7,000 of wages, with most employers receiving a 5.4% credit for timely state unemployment tax payments, resulting in a net 0.6% rate. Moving expense and bicycle commuting reimbursements continued to be subject to FUTA tax during 2022 due to Tax Cuts and Jobs Act provisions (IRS Instructions for Form 940 (2022)). If your business operated in multiple states, you needed to complete Schedule A (Form 940) along with the main form.

Step-by-Step (High Level)

• Gather your records: Collect wage and tax records, state unemployment tax payment documentation, and any prior year tax transcripts from the IRS if needed for reference
  
  
• Complete the correct year form: Use only the 2022 version of Form 940, available from IRS.gov prior year forms section
  
  
• Attach required schedules: Include Schedule A if you're a multi-state employer or had employees in credit reduction states
  
  
• Choose filing method: Mail paper returns to addresses specified in the 2022 instructions (electronic filing may not be available for late returns)
  
  
• Keep detailed copies: Maintain copies of all forms, supporting documentation, and proof of mailing or electronic submission for your records
  
  

Common Mistakes and How to Avoid Them

• Using wrong EIN or business name: Double-check that your Employer Identification Number and business name exactly match what you used when applying for your EIN (IRS Instructions for Form 940 (2022))
  
  
• Incorrectly calculating taxable wages: Remember FUTA applies only to first $7,000 per employee per year; don't include wages beyond this cap in your calculations
  
  
• Forgetting credit reduction adjustments: If you had employees in California, Connecticut, Illinois, New York, or U.S. Virgin Islands in 2022, you must calculate additional tax owed using Schedule A
  
  
• Missing state unemployment tax credits: Ensure you're claiming proper credits for state unemployment taxes paid, but only if paid by your Form 940 due date
  
  
• Incorrect quarterly deposit calculations: Verify that quarterly FUTA tax deposits were calculated and made correctly throughout 2022, as errors here affect your final return
  
  
• Not checking the amended return box: If correcting a previously filed 2022 return, you must check box "a" in the upper right corner and attach an explanation
  
  

What Happens After You File

The IRS typically processes Form 940 within 6-8 weeks for paper returns, though late and amended returns may take longer. You'll receive notices if additional information is needed or if there are discrepancies. If you owe additional tax, you can set up a payment plan using Form 9465 (Installment Agreement Request) or apply online at IRS.gov if you owe $50,000 or less (IRS Instructions for Form 9465). Interest and penalties accrue on unpaid balances at rates set by law—the failure-to-file penalty is 5% per month up to 25% maximum, and failure-to-pay penalty is 0.5% per month (IRS.gov/payments/failure-to-file-penalty). If you disagree with IRS findings, you have appeal rights and can request a conference with the IRS Office of Appeals within 30 days of receiving a formal notice.

FAQs

How much are the penalties for filing my 2022 Form 940 late?

The failure-to-file penalty is 5% of unpaid tax per month (or part of month) up to 25% maximum (IRS.gov/payments/failure-to-file-penalty). If you don't owe tax, there's typically no penalty for filing late. Interest also accrues on unpaid tax and penalties.

Can I get a payment plan if I owe FUTA tax from 2022?

Yes, you can request an installment agreement using Form 9465 if you owe $50,000 or less, or apply online at IRS.gov (IRS Instructions for Form 9465). There are setup fees, but reduced fees may apply for low-income taxpayers or direct debit agreements.

Do I need to get transcripts before filing a late 2022 Form 940?

While not required, getting your wage and income transcripts from IRS.gov can help ensure accuracy, especially if you're missing records. Account transcripts show what the IRS has on file for your business.

Can I still get a refund if I'm filing my 2022 Form 940 late?

Generally yes, if you file by January 31, 2026 (three years from the original due date). However, if you previously filed the return and are now amending it, different rules may apply depending on when payments were made.

Should I also amend my state unemployment tax returns?

This depends on your state's rules and whether the changes affect your state obligations. Contact your state unemployment agency for guidance, as each state has different requirements and deadlines.

What if I discover I didn't need to file Form 940 for 2022?

If you filed but later determine you weren't required to file, you can file an amended return checking the "Final" box and including an explanation (IRS Instructions for Form 940 (2022)). If you never should have been subject to FUTA tax, you may be eligible for a refund of taxes paid.

How do I know if I was affected by credit reduction states in 2022?

If you paid wages to employees working in California, Connecticut, Illinois, New York, or the U.S. Virgin Islands during 2022, you were subject to credit reduction and owe additional FUTA tax. Use Schedule A (Form 940) to calculate the additional amount owed (IRS Schedule A (Form 940) for 2022).

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