Form 940 and FUTA exempt wages
Some employee wages are exempt from Federal Unemployment Tax Act (FUTA tax) because the wages are not included in the definition of wages or the services are not included in the definition of employment. Wages exempt from FUTA tax may include but are not limited to the following:
- Dependent care.
- Fringe benefits.
- Group term life insurance.
- Retirement/Pension.
- Other.
To learn more about FUTA exempt wages, go to Federal Unemployment Tax.
To populate the Payments exempt from FUTA tax section of the 940 form, you'll need to set up the proper taxability of payroll items.
- SelectSetup, thenPayroll items.
- Select theMaintab.
- Edit the FUTA exempt payroll item.
- In the Taxability section choose from theFUTA exempt paymentsdropdown list.
- SelectEnterto save the payroll item.
- Repeat these steps for each FUTA exempt payroll item as needed.
