Employers use the 940 tax form for their annual federal unemployment tax return, states the Internal Revenue Service. As of 2014, the FUTA tax rate is 6 percent and applies to the first $7,000 an employer pays each employee in annual wages. The rules differ for household and agricultural employees.
Generally, employers must file Form 940 if they paid at least $1,500 in wages to employees in any calendar
quarter during the previous two years. They must also use it if they had one or more employees for part of a day in any 20 or more different weeks in at least one of the two prior years. The count includes all temporary, part-time and full-time employees, explains the IRS.