1999 Department of the Treasury Internal Revenue Service Instructions for Form 940-EZ Employer's Annual Federal Unemployment (FUTA) Tax Return Section references are to the Internal Revenue Code unless otherwise noted. General Instructions Who May Use Form 940-EZ Did you pay unemployment contributions to only one state? No Did you pay all state unemployment contributions by January 31?* No Were all wages that were taxable for FUTA tax also taxable for your state’s unemployment tax? No You may use Form 940-EZ. Yes Yes Yes You must use Form 940.** *If you deposited all FUTA tax when due, you may answer  “Yes” if you paid all state unemployment contributions by February 10.  You owe FUTA tax only for household work in a private home. See Household employers on page 2. Also, do not file Form 940-EZ if— The following chart will lead you to the right form to use. However, do not file Form 940-EZ if you have already filed Form 940 for 1999.  You are a successor employer claiming a credit for state unemployment contributions paid by a prior employer. File Form 940. **Get Form 940 and the 1999 Instructions for Form 940 by calling the IRS at 1-800-TAX-FORM (1-800-829-3676) or by visiting the IRS’s Internet Web Site at www.irs.gov. Items To Note FUTA rate.   The (net) FUTA rate of .8% (FUTA tax rate of 6.2% less state credit of 5.4%) is shown as .008 on line 6 of Form 940-EZ.   If you qualify to file Form 940-EZ, you are entitled to the full 5.4% state credit regardless of your actual experience rate. New electronic deposit requirement.   Beginning January 1, 2000, the following changes have been made to the electronic deposit requirement: l  The threshold that determines whether you must use the Electronic Federal Tax Payment System (EFTPS) has been increased from $50,000 to $200,000. l  All Federal tax deposits (such as deposits for employment tax, excise tax, and corporate income tax) made during a calendar year are combined to determine whether you exceeded the $200,000 threshold. If the total of your Federal tax deposits made in 1998 exceeded $200,000, you must use EFTPS beginning January 1, 2000. l  Participation in EFTPS is voluntary if your deposits do not exceed the new $200,000 threshold, even if you were required to electronically deposit under the previous $50,000 threshold. However, businesses that exceed the new $200,000 threshold must continue to use EFTPS in all later years. l  The waiver of the penalty for failure to use EFTPS, scheduled to expire on July 1, 1999, has been extended to January 1, 2000, for taxpayers whose total Federal tax deposits in 1998 did not exceed the new $200,000 threshold. However, taxpayers will remain liable for penalties if a deposit is not made in the required manner. To enroll in EFTPS, call 1-800-945-8400 or 1-800-555-4477.   For general information about EFTPS, call 1-800-829-1040.   Taxpayers who are not required to make electronic deposits may voluntarily participate in EFTPS. State unemployment information.   Employers must contact their state unemployment tax offices to receive their state reporting number, state experience rate, and details about their state unemployment tax obligations. Photographs of Missing Children The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. 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. Cat. No. 25947I