Which form is used to report an employer's FUTA tax liability?

The form used to report an employer's Federal Unemployment Tax Act (FUTA) tax liability is the 940. This annual tax return is specifically designed for employers to report their federal unemployment taxes, which are used to fund unemployment compensation programs. It is important for employers to accurately complete and submit this form to ensure compliance with federal laws governing unemployment insurance.

The 940 form focuses solely on the employer's FUTA tax responsibilities, allowing for proper reporting of taxable wages and calculation of the tax owed. Since FUTA tax is based on employee wages and is distinct from other payroll taxes, such as the federal income tax or Social Security and Medicare taxes, the 940 specifically addresses this aspect of payroll tax reporting.

In contrast, Form 941 is used for reporting income taxes, Social Security tax, and Medicare tax withheld from employees, while Form 945 is utilized for reporting nonpayroll distributions. The W-2 form is used to report wages paid to employees and the taxes withheld, rather than tax liabilities for the employer. Each of these forms serves a different purpose in the payroll reporting framework, but the 940 is the correct form for FUTA tax liability reporting.