QuickBooks Form 940 Interview: What to Know About Schedule A and Business Name Control
QuickBooks walks employers through Form 940 with an interview screen covering Schedule A, FUTA credit reduction states, and e-file Business Name Control requirements.
QuickBooks users preparing Form 940 each year encounter a built-in interview process designed to collect the information needed to complete the federal unemployment tax return. The interview appears automatically when the form is opened, prompting the employer through a series of questions that feed data into Form 940, Form 940V, Schedule A, and the Computation of State Unemployment Credit Adjustment Worksheet.
The Interview Screen
When you launch Form 940 in QuickBooks, the software presents an interview sheet before the form itself. The questions cover details needed to populate the return accurately — gross wages, exempt payments, state unemployment tax information, and other data points the IRS requires. The interview is not optional filler; the answers directly determine how QuickBooks calculates totals and whether additional schedules are generated.
Schedule A Triggers
Two situations require Schedule A to accompany Form 940. The first applies to employers who pay state unemployment insurance (SUI) tax to more than one state during the year. The second applies to employers subject to FUTA credit reduction — a situation that arises when a state has outstanding federal loans used to pay unemployment benefits and has not repaid them.
The U.S. Department of Labor publishes the list of credit reduction states annually. Employers who paid FUTA-taxable wages that were also subject to state unemployment taxes in any listed state with a credit reduction rate above zero owe additional federal unemployment tax. QuickBooks uses Schedule A to calculate that adjustment and roll it into the Form 940 total.
For the 2016 filing year, wages in California and the U.S. Virgin Islands were subject to credit reduction. The IRS has published a FAQ page on FUTA Credit Reduction that links to the Department of Labor’s final list of affected states and jurisdictions.
Business Name Control and E-Filing
One of the more commonly misunderstood elements in the Form 940 interview — and across QuickBooks e-filing generally — is the Business Name Control. This identifier is used to verify your Federal Employer Identification Number (FEIN) and legal business name against the IRS National Account Profile database when you e-file.
The Business Name Control originates from the legal business name submitted on your IRS registration or enrollment paperwork. Because QuickBooks sends this value electronically, it is critical that your legal business name is entered correctly in the Company Information screen. A mismatch between what QuickBooks transmits and what the IRS has on file can cause e-file rejection.
The IRS provides the Name Control on notice CP575, which is issued when an EIN is assigned. Employers who cannot locate that notice or need confirmation of their Name Control can contact the IRS Business and Specialty Help Line by phone; representatives can provide the Name Control to the taxpayer or an authorized representative once proper identity and disclosure requirements are satisfied.
How the Name Control Is Derived
In most cases, the Business Name Control consists of the first four alphanumeric characters of the legal business name. Ampersands and hyphens are the only special characters allowed. Several common exceptions exist, however, and employers may need to adjust the value accordingly:
- Individual name used as the business name: The Name Control is the first four letters of the last name.
- Business name beginning with “The”: If “The” is followed by more than one word, omit it. If “The” is followed by only one word, include it in the Name Control.
Additional exceptions beyond these can apply, so employers with unusual business name structures should verify the Name Control against their IRS records rather than assuming the default rule applies.
Practical Takeaways
The Form 940 interview in QuickBooks is designed to catch the details that matter most for an accurate federal unemployment filing. Two areas tend to cause the most confusion: whether Schedule A is required due to multi-state SUI payments or credit reduction, and whether the Business Name Control on file matches what the IRS expects.
Ensuring your legal business name is correct in QuickBooks Company Information before you begin the interview can prevent e-file rejections downstream. And if you operate in a state with a history of credit reduction, checking the Department of Labor list before filing can help you anticipate whether additional FUTA tax will apply.
For broader QuickBooks payroll and form-filing help, the community knowledge base covers common Form 940 errors and related troubleshooting scenarios.