> ## Documentation Index
> Fetch the complete documentation index at: https://docs.pluvel.com/llms.txt
> Use this file to discover all available pages before exploring further.
# Form 940
> Annual federal unemployment (FUTA) tax return filed by Pluvel.
FUTA — Federal Unemployment Tax — is the one payroll tax that comes entirely out of your pocket, not your employees'. It funds federal unemployment programs and is filed once a year on Form 940.
The math is straightforward: you pay 0.6% on the first $7,000 each employee earns (assuming you paid your state unemployment taxes on time). That's about $42 per employee per year. Pluvel handles the deposits and filing automatically.
## What FUTA is
FUTA funds unemployment insurance at the federal level. It works alongside state unemployment (SUTA):
| Aspect | FUTA | SUTA |
| --------- | -------------------------- | ---------------------------- |
| Who pays | Employer only | Employer (usually) |
| Rate | 6.0% (0.6% after credit) | Varies by state and employer |
| Wage base | First \$7,000 per employee | Varies by state |
| Filed on | Form 940 | State forms |
### The FUTA credit
If you pay state unemployment taxes on time, you receive a credit against FUTA:
* **Standard credit:** 5.4%
* **Net FUTA rate:** 6.0% - 5.4% = 0.6%
This means you effectively pay 0.6% on the first $7,000 per employee = **$42 per employee per year\*\* maximum.
Some states have credit reduction due to federal unemployment loans. This increases your FUTA rate slightly. We track this and apply the correct rate.
## Filing schedule
Form 940 is filed annually:
| For Tax Year | Due Date |
| ------------ | ---------------- |
| 2025 | January 31, 2026 |
| 2026 | January 31, 2027 |
If you deposited all FUTA tax when due, you have until February 10 to file.
## FUTA deposits
FUTA deposits are made quarterly (not with each payroll):
| Quarter | Period | Deposit Due |
| ------- | ------------------ | ----------- |
| Q1 | January - March | April 30 |
| Q2 | April - June | July 31 |
| Q3 | July - September | October 31 |
| Q4 | October - December | January 31 |
You only need to deposit if your accumulated FUTA liability exceeds $500. If it's $500 or less, you can carry it to the next quarter.
### How deposits work
1. After each payroll, we calculate FUTA on wages up to \$7,000 per employee
2. We accumulate the liability through the quarter
3. If it exceeds \$500, we deposit on time
4. If under \$500, it carries forward (deposited with the 940 or next quarter)
## How Pluvel handles 940
We track each employee's wages against the \$7,000 FUTA wage base.
We deposit FUTA when your liability exceeds \$500.
We determine your credit based on state unemployment payments.
In January, we prepare and file your annual 940 return.
## Viewing your 940
Go to **Payroll → Tax Filings → 940** to see:
* **Draft 940** — Current year (before filing)
* **Filed 940s** — Historical returns
* **FUTA deposits** — Quarterly deposit history
### Key lines on Form 940
| Line | Description |
| ------- | -------------------------------------------- |
| Line 3 | Total payments to all employees |
| Line 4 | Payments exempt from FUTA |
| Line 5 | Total taxable FUTA wages |
| Line 7 | FUTA tax before adjustments (Line 5 × 0.006) |
| Line 9 | Credit reduction states adjustment |
| Line 12 | Total FUTA tax after adjustments |
| Line 13 | FUTA tax deposited |
| Line 14 | Balance due or overpayment |
## Credit reduction states
When states borrow from the federal government to pay unemployment benefits and don't repay on time, employers in that state lose part of their FUTA credit:
### How it works
* Normal credit: 5.4% (net rate 0.6%)
* If credit reduction applies: Credit reduced by 0.3% per year
* You pay higher FUTA tax
### Checking your state
We monitor credit reduction states and apply the correct rate automatically. Affected states are listed on Form 940 Schedule A.
Recent credit reduction states have included:
* California (historically)
* New York (historically)
* Various states during economic downturns
## Common 940 situations
If you have employees in multiple states:
1. FUTA applies to all employees regardless of state
2. State unemployment credits vary by state
3. We calculate blended credits based on wages in each state
4. Schedule A lists your state breakdown
If this is your first year:
1. You may not have paid enough SUTA to get full credit
2. Your 940 may show additional FUTA due
3. This balances out as your state payments normalize
Once an employee earns \$7,000:
1. No more FUTA accrues for them that year
2. Most employees hit this in Q1 or Q2
3. Your quarterly deposits decrease as more employees max out
If you deposited more than you owe:
1. You can apply the overpayment to next year's 940
2. Or request a refund from the IRS
3. We note the overpayment and track the credit
## Special considerations
### Exempt wages
Certain payments don't count toward FUTA:
* Family employees (under certain conditions)
* Wages to H-2A visa workers
* Retirement/pension payments
* Group life insurance payments
We exclude exempt wages automatically based on your payroll setup.
### Closing a business
If you close your business during the year:
1. File a final 940 covering the period you were open
2. Check the "final return" box
3. We help you with the closure process
## Accessing filed returns
To download a filed 940:
1. Go to **Payroll → Tax Filings**
2. Select the year
3. Click **Download PDF**
The PDF includes Schedule A (for multi-state employers) if applicable.
Learn about SUTA and state requirements.
Quarterly federal tax return.