QuickBooks calculates the 940 tax rate based on the Federal Unemployment Tax Rate (FUTA) set by the Internal Revenue Service (IRS), ensuring that your calculations for payroll reporting are accurate, Tails.
The ability to adjust 940 tax rate in QuickBooks Online is unavailable. According to the IRS, the Form 940 FUTA rate is 6.0% or 0.06 in decimal form. Therefore, the calculation in QuickBooks is accurate, and the tax applies to the first $7,000 you pay each employee as wages during the year. This $7,000 is known as the federal or FUTA wage base. Your state wage base may differ based on the rules of each state.
For complete details, refer to the IRS website about Topic no. 759, Form 940: Employers Annual Federal Unemployment (FUTA) Tax Return.
If you're ready to file your taxes and forms and need guidance on how to do so, please refer to this article for step-by-step instructions: Pay and file payroll taxes and forms.
Whenever you need further guidance with other payroll tasks or what to do next, consider working with our Explore QuickBooks Payroll team. These experts can help streamline your payroll processes and provide customized guidance based on your business's needs.
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