Can Form 940 be signed electronically?

Yes. Electronic signatures meet legal requirements when they show signer intent, consent, attribution, and retention capability under ESIGN (15 U.S.C. §7001) and UETA. Ensure your process documents consent and preserves a reproducible record.

Who must sign Form 940?

An authorized officer, owner, or agent with proper authorization should sign. Employers commonly delegate preparer authority to CPAs or payroll providers, but the signer must be authorized to bind the employer.

What records should I keep with Form 940?

Retain wage summaries, deposit records, W-2 copies, and the signed Form 940 for at least three years per IRC §6501(a); FLSA payroll records should be retained for 3 years (29 CFR §516.5).

What if I discover an error after filing?

Correct material errors by following IRS guidance for amended returns or adjustments. Keep documentation of the correction and consult a tax professional for complex corrections.

Are remote notarization or witnesses required?

Form 940 itself does not require notarization. If signature authentication or notary is desired for internal controls, follow state RON rules and record-keeping requirements.

Is a HIPAA BAA needed when using e-sign?

If payroll records include protected health information and a vendor will handle PHI, execute a HIPAA business associate agreement (BAA). Choose a platform with HIPAA-compliant controls when required.

Tax Form 940

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

Tax Form 940 — Employer's Annual Federal Unemployment (FUTA) Tax Return

Tax year:

Employer identification

Employer name (legal): Trade name (doing business as), if any: Address:

Employer identification number (EIN):

Social security number (if individual employer):

Employer telephone number:

Entity type (check all that apply)

Individual / Sole Proprietor
C Corporation
S Corporation
Partnership
Trust / Estate
LLC
Other (specify below)

If Other, describe:

Part 1 — FUTA tax before adjustments

1. Payments subject to FUTA wages for the year (total wages paid to employees subject to FUTA):

2. Payments exempt from FUTA (state unemployment contributions and other exclusions):

3. Subtract line 2 from line 1 — FUTA taxable wages:

4. FUTA tax rate (enter decimal rate; default federal rate is generally 0.006):

5. Multiply line 3 by line 4 — FUTA tax before adjustments:

Part 2 — Adjustments, deposits, and balance

6. Adjustments for state unemployment credit and other allowable credits (enter negative amounts as adjustments):

7. FUTA tax after adjustments (add lines 5 and 6):

8. Total deposits for the year (including any overpayment applied from prior year):

9. Balance due (line 7 minus line 8) — amount owed with this return:

10. Overpayment (if line 8 exceeds line 7):

If you have adjustments, explain below:

Payments and Deposits (Record of deposits)

Enter quarterly deposits and dates of deposit. Quarter 1 (Jan–Mar): Amount Date:

Quarter 2 (Apr–Jun): Amount Date:

Quarter 3 (Jul–Sep): Amount Date:

Quarter 4 (Oct–Dec): Amount Date:

Certification and penalties

Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements and to the best of my knowledge and belief they are true, correct, and complete. I further certify that I am an officer or other person authorized to sign this return on behalf of the employer and that I have the authority to execute this document.

The signer acknowledges the following representations and conditions:

1. The figures reported on this form reflect all taxable FUTA wages and tax liabilities for the period specified and include adjustments required by federal law. The signer accepts responsibility for the accuracy and completeness of the reported amounts.

2. The signer understands that willful false statements or omissions may subject the signer to civil or criminal penalties under applicable law, including penalties for perjury and for failure to file or pay taxes when due.

3. The signer authorizes assessment and collection of any unpaid FUTA tax, additions to tax, penalties, and interest as provided by law and certifies that the employer has maintained adequate records to support the amounts reported.

Preparer (if other than taxpayer) — preparer's name: Preparer's contact number:

Printed name of signer:

Title:

Signature:

Date:

What Tax Form 940 is and who it covers

Tax Form 940 is the IRS annual return employers use to report and reconcile Federal Unemployment Tax Act (FUTA) liability for the calendar year. It summarizes FUTA taxable wages, allowable credits for state unemployment taxes, deposits made during the year, and any balance due or overpayment. Employers who paid wages subject to FUTA must use Form 940 to calculate their net FUTA tax and determine whether additional deposits or a refund are required. Accurate annual filing supports state unemployment funding and federal compliance.

Why accurate Form 940 filing matters

Correct Form 940 filing ensures compliance with federal unemployment tax rules, preserves FUTA tax credits tied to state unemployment tax payments, and minimizes penalty and interest exposure for employers.

Which employers commonly complete Form 940

In practice, employers across real estate, healthcare, and financial services frequently prepare Form 940 as part of year-end payroll close procedures.

Small and mid-size employers with payroll and seasonal staff who must reconcile annual FUTA liability.
Payroll teams and outsourced payroll providers responsible for federal tax reconciliation and deposits.
HR and finance teams who maintain wage records and ensure state unemployment payments qualify for FUTA credits.

Step-by-step: preparing and filing Form 940

Follow these practical steps to assemble payroll totals, compute FUTA tax, and complete filing accurately.

01

Gather payroll records: Collect quarterly wage reports and W-2 totals.
02

Compute taxable wages: Apply FUTA wage limits and exemptions.
03

Reconcile deposits: Subtract deposits and state UI credits from gross tax.
04

File and retain: Submit Form 940 and keep records per IRS rules.

Configuring an online workflow for Form 940

Set up an e-sign and e-file workflow that enforces required fields, signer order, and retention policies before submission.

Field validation	Require EIN, signature, and dates to prevent incomplete submissions
Authentication	Use email link with optional SMS code for signer verification
Routing order	Employer -> Preparer -> Authorized signatory
Attachments	Attach supporting W-2 summaries and deposit records
Retention policy	Auto-archive signed PDFs and audit trail for minimum retention

Where Form 940 is submitted and how transmission works

Filing options include IRS e-file channels, authorized third-party payroll providers, or mailed returns where accepted by the IRS.

IRS e-file: Transmit electronically through IRS-authorized software or an approved provider
Payroll provider: Many payroll vendors file Form 940 on employers' behalf via e-file
Paper filing: Mail only when IRS instructions permit; expect longer processing
Record retention: Keep signed copy and audit trail for compliance and audit support

Technical and platform requirements for e-signing Form 940

Choose a solution that preserves tamper-evident signed PDFs, audit logs, and secure storage to meet ESIGN and IRS recordkeeping expectations.

File formats: PDF and PDF/A are preferred for IRS compatibility
Integrations: Connectors for payroll systems and Google/Microsoft improve workflow
Authentication: Support for email, SMS, and advanced signer verification

Key timing and filing considerations for Form 940

Observe federal deadlines and deposit schedules for FUTA to avoid penalties; check IRS instructions for year-specific changes.

Annual filing date:

Form 940 is generally due January 31 following the calendar year

Deposit timing:

FUTA deposits follow IRS deposit schedules; late deposits incur penalties and interest

Quarterly records:

Maintain quarterly wage and deposit records for reconciliation

Electronic filing:

E-filing is available through payroll providers and authorized software

Extensions:

Follow IRS guidance for extensions or special deposit rules

Annual filing milestones for Form 940

A typical annual timeline helps ensure payroll totals, deposits, and reconciliation are completed before filing.

01

Close payroll year

Finalize wages, corrections, and W-2 reconciliation before filing

02

Reconcile deposits

Match quarterly FUTA and state UI payments against tax liability

03

Complete Form 940

Enter totals, credits, deposits, and compute balance due or refund

04

File and archive

Submit return, retain signed PDF and audit trail for the retention period

Common mistakes to avoid when preparing Form 940

Using an incorrect EIN or business name that fails IRS matching checks
Omitting state unemployment tax credits that reduce federal FUTA liability
Failing to record deposits correctly, leading to overstated balances due
Not retaining signed returns and underlying wage records for audits

Penalties and risks tied to incorrect or late Form 940 filing

Failure to file: Adds penalties and interest

Failure to deposit: Triggers deposit penalty and interest

Incorrect credits: May disallow state UI credits

Mismatched EIN: Causes processing delays and notices

Incomplete records: Complicates audits and penalty defenses

Intentional misstatement: Can lead to severe civil or criminal exposure

Security and compliance considerations for e-signed returns

Encryption: TLS 1.2/1.3 in transit

Data at rest: AES-256 encryption

Certifications: SOC 2 Type II and ISO 27001

Regulatory: ESIGN and UETA compliant

Healthcare: HIPAA-compliant with BAA available

Audit trail: Tamper-evident logs and timestamps

How Form 940 compares to related payroll filings

Compare Form 940 with Form 941 and state unemployment returns to clarify scope, frequency, and enforcement differences.

Criteria	Form 941	State UI
Filing frequency	quarterly	varies by state
Who files	employers	employers
Tax type	federal payroll tax	state unemployment tax
Due date nature	quarterly due dates	state-specific due dates

Real-world examples of completing annual FUTA reconciliation

These condensed examples show how organizations reconcile payroll records and use e-sign and e-file workflows for Form 940.

Optica Ventures / COO

Optica centralized payroll reconciliation using an online workflow that captured signed approvals

They reduced return preparation time by consolidating wage data
The result was fewer reconciliation errors and consistent annual Form 940 filings with preserved state UI credits.

Martin Properties / Founder

Martin Properties shifted to an e-sign and archive process for year-end payroll approvals

The owner signed electronically from mobile to approve totals
This enabled timely filing, simplified auditor requests, and secure retention of the signed Form 940.

eSignature provider pricing and capability snapshot relevant to Form 940 workflows

Compare common eSignature plan features for managing Form 940 documents and signed records; signNow appears first per platform comparison conventions.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	No	No	Yes, limited	Yes, limited
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Frequently asked questions about Form 940 and e-signing

Answers to common questions about filing Form 940, acceptable electronic signatures, and recordkeeping for audits.

Need help? Contact support

Can Form 940 be signed electronically?
Yes. Electronic signatures meet legal requirements when they show signer intent, consent, attribution, and retention capability under ESIGN (15 U.S.C. §7001) and UETA. Ensure your process documents consent and preserves a reproducible record.
Who must sign Form 940?
An authorized officer, owner, or agent with proper authorization should sign. Employers commonly delegate preparer authority to CPAs or payroll providers, but the signer must be authorized to bind the employer.
What records should I keep with Form 940?
Retain wage summaries, deposit records, W-2 copies, and the signed Form 940 for at least three years per IRC §6501(a); FLSA payroll records should be retained for 3 years (29 CFR §516.5).
What if I discover an error after filing?
Correct material errors by following IRS guidance for amended returns or adjustments. Keep documentation of the correction and consult a tax professional for complex corrections.
Are remote notarization or witnesses required?
Form 940 itself does not require notarization. If signature authentication or notary is desired for internal controls, follow state RON rules and record-keeping requirements.
Is a HIPAA BAA needed when using e-sign?
If payroll records include protected health information and a vendor will handle PHI, execute a HIPAA business associate agreement (BAA). Choose a platform with HIPAA-compliant controls when required.

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