QuickBooks Form 940: How to Review and E-File Your Annual FUTA Return
QuickBooks prefills most Form 940 fields from payroll data, but employers must verify wages, credit reductions, and preparer details before filing. Here is what to check.
QuickBooks Desktop users filing their annual Federal Unemployment (FUTA) Tax Return can rely on the software to prefill most of Form 940, but the prefilled numbers are only as reliable as the payroll data behind them. Several details — from credit-reduction states to preparer tax identification — still require a manual review before the return goes out.
What Form 940 Covers
Form 940 reports the annual federal unemployment tax that employers owe. Only the employer pays FUTA tax; it is not withheld from employee wages. The tax applies to the first $7,000 paid to each employee during the year, after subtracting any exempt payments. The FUTA tax rate stands at 6.0%, though most employers receive a credit of up to 5.4% for paying state unemployment taxes on time, effectively reducing the net federal rate to 0.6%.
How QuickBooks Populates the Form
QuickBooks builds the Form 940 amounts from the total wages you have paid out, tracked through your payroll items. When your company, payroll, and employee data are all entered and up to date in QuickBooks, the software fills in the majority of the fields automatically. In most cases, you will not need to enter additional information beyond what QuickBooks generates.
That said, the automation does not cover everything. You should review every field QuickBooks did not fill in and supply any missing information before filing.
Navigating to the Form in QuickBooks Desktop
To open Form 940 in QuickBooks Desktop, go to the Employees menu, select Payroll Forms, then Process Payroll Forms. Choose Federal Form 940 from the list of available forms and select the correct tax year. QuickBooks will walk through a series of screens where the prefilled wage totals and tax calculations appear for your review.
If you need to understand where a specific number on the form originated, click the Help button directly within the form window. QuickBooks provides context-specific guidance on how each line was calculated and which payroll items contributed to the total.
Checking for Credit Reduction States
Employers who paid wages in a credit-reduction state must complete Schedule A (Form 940) and attach it to the main return. A state falls into credit reduction when it has not repaid money it borrowed from the federal government to cover unemployment benefits. When this happens, the employer’s effective FUTA tax rate increases until the state repays its loan balance.
QuickBooks includes Schedule A support, but you must confirm whether any of your employees worked in an affected state during the tax year. The IRS publishes the current list of credit-reduction states on its Form 940 page, so verify the list against your payroll records before finalizing the return.
Preparer Tax Identification Number (PTIN) Requirement
If you prepare tax returns for compensation, you must include a valid Preparer Tax Identification Number on every Form 940 you file. This requirement has been mandatory — not optional — for paid preparers. If you obtained a PTIN before September 28, 2010, you must reapply through the IRS sign-up system. If your authentication information matches, the IRS may issue the same number back to you. Without a current PTIN, paid preparers cannot legally file the return.
E-Filing and Saving a Copy
QuickBooks supports both electronic filing and electronic payment of Form 940 liabilities. To e-file, use the E-File option within the form workflow and follow the prompts to submit the return through the QuickBooks e-file service. To save a copy of the completed form for your records, use the Save as PDF or print option before closing the form window.
Summarizing Payroll Data in Excel
For users who want to cross-reference their Form 940 figures against a spreadsheet, QuickBooks allows you to export payroll summary data to Microsoft Excel. From the Reports menu, navigate to Employees & Payroll, then select Payroll Summary. Adjust the date range to match your tax year, then click Excel to export the report. This gives you a side-by-side view of wage totals, tax withholdings, and employer-paid liabilities that feed into the annual return.
When Prefilled Numbers Do Not Match
If the amounts on Form 940 do not align with what you expect, the discrepancy almost always traces back to a payroll item setup issue — wages assigned to the wrong tracking type, an exempt payment not flagged correctly, or a year-end adjustment that has not posted. Reviewing each payroll item’s wage-tracking classification is the fastest path to resolving the mismatch before you file.