Reminders

Electronically filing an amended Form 940. The IRS offers filing an amended Form 940 as part of Modernized e-File (MeF). For more information on electronic filing, go to IRS.gov/EmploymentEfile .

Form 940 (sp) available in Spanish. All employers, including employers in Puerto Rico and the U.S. Virgin Islands, have the option to file Form 940 (sp).

Moving expense and bicycle commuting reimburse- ments are subject to FUTA tax. The Tax Cuts and Jobs Act (P.L. 115-97) suspends the exclusion for qualified moving expense reimbursements from your employee’s income under section 132 and the deduction from the employee’s income under section 217, as well as the exclusion for qualified bicycle commuting reimbursements from your employee’s income under section 132, beginning after 2017 and before 2026. Therefore, moving expense and bicycle commuting reimbursements aren’t exempt from FUTA tax during this period. Don’t include moving expense or bicycle commuting reimbursements on Form 940, line 4. P.L. 119-21, commonly known as the One Big Beautiful Bill Act, permanently eliminates these exclusions after tax year 2025 and will be discussed in more detail in the 2026 Instructions for Form 940. For more information about fringe benefits, see Pub. 15-B.

Certification program for professional employer or- ganizations (PEOs). The Stephen Beck, Jr., Achieving a Better Life Experience (ABLE) Act of 2014 required the IRS to establish a voluntary certification program for PEOs. PEOs handle various payroll administration and tax reporting responsibilities for their business clients and are typically paid a fee based on payroll costs. To become and remain certified under the certification program, CPEOs must meet various requirements described in sections 3511 and 7705 and related published guidance. Certification as a CPEO may affect the employment tax liabilities of both the CPEO and its customers. A CPEO is generally treated for employment tax purposes as the employer of any individual who performs services for a customer of the CPEO and is covered by a contract

Instructions for Form 940 (2025) Catalog Number 13660I Nov 18, 2025 Department of the Treasury Internal Revenue Service www.irs.gov

described in section 7705(e)(2) between the CPEO and the customer (CPEO contract), but only for wages and other compensation paid to the individual by the CPEO. To become a CPEO, the organization must apply through the IRS Online Registration System. For more information or to apply to become a CPEO, go to IRS.gov/CPEO .

For wages paid to a work site employee, a CPEO is eligible for the credit for state unemployment tax paid to a state unemployment fund, whether the CPEO or a customer of the CPEO made the contribution. In addition, a CPEO is allowed the additional credit if the CPEO is permitted, under state law, to collect and remit contributions to the state unemployment fund with respect to a work site employee. For more information on the credit, see Credit for State Unemployment Tax Paid to a State Unemployment Fund , later.

CPEOs must generally file Form 940 and Schedule R (Form 940), Allocation Schedule for Aggregate Form 940 Filers, electronically. For more information about a CPEO’s requirement to file electronically, see Rev. Proc. 2023-18, 2023-13 I.R.B. 605, available at IRS.gov/irb/ 2023-13_IRB#REV-PROC-2023-18 .

Outsourcing payroll duties. Generally, as an employer, you’re responsible to ensure that tax returns are filed and deposits and payments are made, even if you contract with a third party to perform these acts. You remain responsible if the third party fails to perform any required action. Before you choose to outsource any of your payroll and related tax duties (that is, withholding, reporting, and paying over social security, Medicare, FUTA, and income taxes) to a third-party payer, such as a payroll service provider or reporting agent, go to IRS.gov/ OutsourcingPayrollDuties for helpful information on this topic. If a CPEO pays wages and other compensation to an individual performing services for you, and the services are covered by a CPEO contract, then the CPEO is generally treated for employment tax purposes as the employer, but only for wages and other compensation paid to the individual by the CPEO. However, with respect to certain employees covered by a CPEO contract, you may also be treated as an employer of the employees and, consequently, may also be liable for federal employment taxes imposed on wages and other compensation paid by the CPEO to such employees. For more information on the different types of third-party payer arrangements, see section 16 of Pub. 15, Employer’s Tax Guide.

Aggregate Form 940 filers. Approved section 3504 agents and CPEOs must complete Schedule R (Form 940) when filing an aggregate Form 940. Aggregate Forms 940 are filed by agents of home care service recipients approved by the IRS under section 3504. To request approval to act as an agent for an employer, the agent files Form 2678 with the IRS unless you’re a state or local government agency acting as an agent under the special procedures provided in Rev. Proc. 2013-39, 2013-52 I.R.B. 830, available at IRS.gov/irb/ 2013-52_IRB#RP-2013-39 . Aggregate Forms 940 are also filed by CPEOs approved by the IRS under section 7705. CPEOs file Form 8973, Certified Professional Employer Organization/ Customer Reporting Agreement, to notify the IRS that they

started or ended a service contract with a customer. CPEOs must generally file Form 940 and Schedule R (Form 940) electronically. For more information about a CPEO’s requirement to file electronically, see Rev. Proc. 2023-18 . If you’re filing an aggregate Form 940, you must identify yourself on Form 940. For more information, see Aggregate Return Filers Only, later.

If you change your business name, business ad- dress, or responsible party. Notify the IRS immediately if you change your business name, business address, or responsible party.

• Write to the IRS office where you file your returns (using the Without a payment address under Where Do You File , later) to notify the IRS of any business name change. See Pub. 1635 to see if you need to apply for a new employer identification number (EIN).

• Complete and mail Form 8822-B to notify the IRS of a business address or responsible party change. Don’t mail Form 8822-B with your Form 940. For a definition of “responsible party,” see the Instructions for Form SS-4.

Federal tax deposits must be made by electronic funds transfer (EFT). You must use EFT to make all federal tax deposits. An EFT can be made using the Electronic Federal Tax Payment System (EFTPS), IRS Direct Pay, or your IRS business tax account. If you don’t want to use one of these methods, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. EFTPS is a free service provided by the Department of the Treasury. Payments made using IRS Direct Pay or through your IRS business tax account are also free. Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee.

For more information on making federal tax deposits, see section 11 of Pub. 15. To get more information about EFTPS or to enroll in EFTPS, go to EFTPS.gov , or call 800-555-4477 or 800-244-4829 (Spanish). To contact EFTPS using Telecommunications Relay Services (TRS) for people who are deaf, hard of hearing, or have a speech disability, dial 711 and then provide the TRS assistant the 800-555-4477 number above or 800-733-4829. Additional information about EFTPS is also available in Pub. 966. For more information about IRS Direct Pay, go to IRS.gov/ DirectPay . For more information about making a payment through your IRS business tax account, go to IRS.gov/ BusinessAccount .

Electronic filing and payment. Businesses can enjoy the benefits of filing tax returns and paying their federal taxes electronically. Whether you rely on a tax professional or handle your own taxes, the IRS offers you convenient and secure programs to make filing and paying easier. Spend less time worrying about taxes and more time running your business. Use e-file and electronic payment options to your benefit.

• For e-file, go to IRS.gov/EmploymentEfile for additional information. A fee may be charged to file electronically.

2 Instructions for Form 940 (2025)

• For electronic payment options, see the instructions for

line 14, later, and go to IRS.gov/Pay .

Electronic funds withdrawal (EFW). If you file Form 940 electronically, you can e-file and use EFW to pay the balance due in a single step using tax preparation software or through a tax professional. However, don’t use EFW to make federal tax deposits. For more information on paying your taxes using EFW, go to IRS.gov/EFW .

Credit or debit card payments. You may pay your FUTA tax shown on line 14 using a credit or debit card. Your payment will be processed by a payment processor who will charge a processing fee. Don’t use a credit or debit card to pay taxes that are required to be deposited (see When Must You Deposit Your FUTA Tax, later). For more information on paying your taxes with a credit or debit card, go to IRS.gov/PayByCard .

Online payment agreement. You may be eligible to apply for an installment agreement online if you can’t pay the full amount of tax you owe when you file your return. For more information, see What if you can't pay in full , later.

Disregarded entities and qualified subchapter S sub- sidiaries (QSubs). Business entities that are disregarded as separate from their owner, including QSubs, are required to withhold and pay employment taxes and file employment tax returns using the name and EIN of the disregarded entity. For more information, see Disregarded entities, later.

State unemployment information. When you registered as an employer with your state, the state assigned you a state reporting number. If you don’t have a state unemployment account and state experience tax rate, or if you have questions about your state account, you must contact your state unemployment agency. For a list of state unemployment agencies, go to the U.S. Department of Labor’s website at oui.doleta.gov/ unemploy/agencies.asp .

Paid preparers. If you use a paid preparer to complete Form 940, the paid preparer must complete and sign the paid preparer’s section of the form.

Photographs of missing children. The IRS is a proud partner with the National Center for Missing & Exploited Children® (NCMEC) . Photographs of missing children selected by the Center may appear in instructions on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.