Tax Calendar Details

The Irs Form 940 Schedule A is a document that tax payers must submit in order to declare their deductions and taxable income. This form can be filled out manually or using tax software. There are many different deductions that can be claimed on Schedule A, so it is important to understand what is eligible for deduction. In this blog post, we will discuss some of the most common deductions that can be claimed on Schedule A. We will also provide a link to the Irs website where taxpayers can find more information about Schedule A.

This page has got information about irs form 940 schedule a. Before you complete the form, it's worth examining more about it.

QuestionAnswer
Form NameIrs Form 940 Schedule A
Form Length2 pages
Fillable?Yes
Fillable fields1
Avg. time to fill out42 sec
Other names940 online, form 940, 2020 form 940, form 940 2020

Form Preview Example

Schedule A (Form 940) for 2021:

Multi-State Employer and Credit Reduction Information

Department of the Treasury — Internal Revenue Service

Employer identification number (EIN)

 

 

 

 

 

 

 

Name (not your trade name)

860312

OMB No. 1545-0028

See the instructions on page 2. File this schedule with Form 940.

Place an “X” in the box of EVERY state in which you had to pay state unemployment tax this year. For the U.S. Virgin Islands, enter the FUTA taxable wages and the reduction rate (see page 2). Multiply the FUTA taxable wages by the reduction rate and enter the credit reduction amount. Don’t include in the FUTA Taxable Wages box wages that were excluded from state unemployment tax (see the instructions for Step 2). If any states don’t apply to you, leave them blank.

 

Postal

FUTA

Reduction

Credit Reduction

 

Postal

FUTA

Reduction

Credit Reduction

Abbreviation

Taxable Wages

Rate

 

 

Abbreviation

Taxable Wages

Rate

 

 

 

 

AK

 

.

 

 

.

 

 

 

NC

.

 

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AL

 

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ND

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AR

 

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NE

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AZ

 

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NH

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CA

 

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NJ

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CO

 

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NM

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CT

 

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NV

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DC

 

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NY

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DE

 

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OH

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FL

 

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OK

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GA

 

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OR

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HI

 

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PA

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IA

 

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RI

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ID

 

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SC

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IL

 

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SD

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IN

 

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TN

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KS

 

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TX

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KY

 

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UT

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LA

 

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VA

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MA

 

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VT

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MD

 

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WA

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ME

 

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WI

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MI

 

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WV

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MN

 

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WY

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MO

 

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PR

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MS

 

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VI

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MT

 

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Total Credit Reduction. Add all amounts shown in the Credit Reduction boxes. Enter the total here and on Form 940, line 11 . . . . . . . . . . . . . . . . . . . . . .

.

For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 940.

Cat. No. 16997C

Schedule A (Form 940) 2021

Instructions for Schedule A (Form 940) for 2021:

860412

 

Multi-State Employer and Credit Reduction Information

 

 

 

Specific Instructions: Completing Schedule A

 

Step 1. Place an “X” in the box of every state (including the District of Columbia, Puerto Rico, and the U.S. Virgin Islands) in which you had to pay state unemployment taxes this year, even if the state’s credit reduction rate is zero.

Note: Make sure that you have applied for a state reporting number for your business. If you don’t have an unemployment account in a state in which you paid wages, contact the state unemployment agency to receive one. For a list of state unemployment agencies, visit the U.S. Department of Labor’s website at https://oui.doleta.gov/unemploy/agencies.asp.

The table below provides the two-letter postal abbreviations used on Schedule A.

 

Postal

 

Postal

State

Abbreviation

State

Abbreviation

 

 

 

 

Alabama

AL

Montana

MT

Alaska

AK

Nebraska

NE

Arizona

AZ

Nevada

NV

Arkansas

AR

New Hampshire

NH

California

CA

New Jersey

NJ

Colorado

CO

New Mexico

NM

Connecticut

CT

New York

NY

Delaware

DE

North Carolina

NC

District of Columbia

DC

North Dakota

ND

Florida

FL

Ohio

OH

Georgia

GA

Oklahoma

OK

Hawaii

HI

Oregon

OR

Idaho

ID

Pennsylvania

PA

Illinois

IL

Rhode Island

RI

Indiana

IN

South Carolina

SC

Iowa

IA

South Dakota

SD

Kansas

KS

Tennessee

TN

Kentucky

KY

Texas

TX

Louisiana

LA

Utah

UT

Maine

ME

Vermont

VT

Maryland

MD

Virginia

VA

Massachusetts

MA

Washington

WA

Michigan

MI

West Virginia

WV

Minnesota

MN

Wisconsin

WI

Mississippi

MS

Wyoming

WY

Missouri

MO

Puerto Rico

PR

 

 

U.S. Virgin Islands

VI

Credit reduction state. For 2021, the U.S. Virgin Islands (USVI) is the only credit reduction state. The credit reduction rate is 0.033 (3.3%).

Step 2. You’re subject to credit reduction if you paid FUTA taxable wages that were also subject to state unemployment taxes in the USVI.

In the FUTA Taxable Wages box, enter the total FUTA taxable wages that you paid in the USVI. (The FUTA wage base for all states is $7,000.) However, don’t include in the FUTA Taxable Wages box wages that were excluded from state unemployment tax. For example, if you paid $5,000 in FUTA taxable wages in the USVI but $1,000 of those wages were excluded from state unemployment tax, report $4,000 in the FUTA Taxable Wages box.

Note: Don’t enter your state unemployment wages in the FUTA Taxable Wages box.

Enter the reduction rate and then multiply the total FUTA taxable wages by the reduction rate.

Enter your total in the Credit Reduction box at the end of the line.

Step 3. Total credit reduction

To calculate the total credit reduction, add up all of the Credit Reduction boxes and enter the amount in the Total Credit Reduction box.

Then enter the total credit reduction on Form 940, line 11.

Example 1

You paid $20,000 in wages to each of three employees in State A. State A is subject to credit reduction at a rate of 0.033 (3.3%). Because you paid wages in a state that is subject to credit reduction, you must complete Schedule A and file it with Form 940.

Total payments to all employees in State A . . . . . . $60,000

Payments exempt from FUTA tax

(see the Instructions for Form 940) . . . . . . . . . . $0

Total payments made to each employee in

excess of $7,000 (3 x ($20,000 - $7,000)) . . . . . . . $39,000

Total FUTA taxable wages you paid in State A entered in

the FUTA Taxable Wages box ($60,000 - $0 - $39,000) . . . $21,000 Credit reduction rate for State A . . . . . . . . . . 0.033 Total credit reduction for State A ($21,000 x 0.033) . . . . $693.00

 

Don’t include in the FUTA Taxable Wages box wages

!

in excess of the $7,000 wage base for each employee

subject to state unemployment insurance in the credit

CAUTION

reduction state. The credit reduction applies only

 

to FUTA taxable wages that were also subject to state unemployment tax.

In this case, you would write $693.00 in the Total Credit Reduction box and then enter that amount on Form 940, line 11.

Example 2

You paid $48,000 ($4,000 a month) in wages to Mary Smith and no payments were exempt from FUTA tax. Mary worked in State B (not subject to credit reduction) in January and then transferred to State C (subject to credit reduction) on February

1.Because you paid wages in more than one state, you must complete Schedule A and file it with Form 940.

The total payments in State B that aren’t exempt from FUTA tax are $4,000. Since this payment to Mary doesn’t exceed the $7,000 FUTA wage base, the total FUTA taxable wages paid in State B are $4,000.

The total payments in State C that aren’t exempt from FUTA tax are $44,000. However, $4,000 of FUTA taxable wages was paid in State B with respect to Mary. Therefore, the total FUTA taxable wages with respect to Mary in State C are $3,000 ($7,000 (FUTA wage base) - $4,000 (total FUTA taxable wages paid in State B)). Enter $3,000 in the FUTA Taxable Wages box, multiply it by the Reduction Rate, and then enter the result in the Credit Reduction box.

Attach Schedule A to Form 940 when you file your return.

Page 2

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