The annual federal unemployment tax return. FUTA is paid by employers only, at 6 percent on the first $7,000 of each employee's wages, reduced to 0.6 percent when state unemployment tax is paid on time.
It is small per employee but easy to miss because it is annual and employer-only. Late state unemployment payments raise the federal rate.
Yes. An owner-employee's salary is subject to FUTA like any other employee's.
Source: IRS Form 940 instructions
Last reviewed September 17, 2026. Tax rules change; confirm current law before acting.
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