940

Multi-State Employer and Credit Reduction Information

Agency
IRS
Revision
2025
Fillable fields
330
Pages
2
Official source
IRS form page
Checked
October 21, 2026
Fill 940 online
Page 1 of form 940

2025 Schedule A (Form 940): Multi-State Employer and Credit Reduction Information

Schedule A (Form 940), Multi-State Employer and Credit Reduction Information, is an employer's schedule filed with Form 940, the annual Federal Unemployment Tax Act (FUTA) tax return. The About Form 940 page says: "Use Schedule A (Form 940) to figure your annual Federal Unemployment Tax Act (FUTA) tax for states that have a credit reduction on wages that are subject to the unemployment compensation laws."

The schedule lists every state, the District of Columbia, Puerto Rico and the U.S. Virgin Islands by postal abbreviation. The employer marks each one where it had to pay state unemployment tax this year. For each state with a credit reduction rate greater than zero, it enters the FUTA taxable wages, the reduction rate and the credit reduction amount, then carries the total to Form 940, line 11. Page 2 holds the instructions and gives the 2025 rates: 0.012 (1.2%) for California and 0.045 (4.5%) for the U.S. Virgin Islands.

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What's on Schedule A (Form 940)

Employer details

Employer identification number (EIN) and name, not the trade name.

State grid

One row for each state, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, each with a box to mark with an X.

FUTA Taxable Wages

The total FUTA taxable wages paid in each credit reduction state, leaving out wages excluded from state unemployment tax.

Reduction Rate

The credit reduction rate for the state, which page 2 lists for 2025.

Credit Reduction

FUTA taxable wages multiplied by the reduction rate for each state.

Total Credit Reduction

The sum of all Credit Reduction boxes, entered on the schedule and on Form 940, line 11.

How to fill out Schedule A (Form 940)

  1. 1

    Step 1: mark the states

    Place an X in the box of every state where state unemployment taxes were paid this year, even at a zero rate. Leave states that do not apply blank. Page 2 has the postal abbreviation table.

  2. 2

    Step 2: FUTA taxable wages

    For each credit reduction state, enter the FUTA taxable wages. The FUTA wage base for all states is $7,000. Do not include wages excluded from state unemployment tax, and do not enter state unemployment wages.

  3. 3

    Rate and credit reduction

    Enter the reduction rate, multiply the FUTA taxable wages by it, and enter the result in the Credit Reduction box at the end of the line.

  4. 4

    Step 3: total

    Add all the Credit Reduction boxes, enter the sum in the Total Credit Reduction box, and enter the same amount on Form 940, line 11.

  5. 5

    Attach to Form 940

    Page 2 says to attach Schedule A to Form 940 when you file your return.

These steps follow the Specific Instructions on page 2 of the schedule.

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Where it goes, 2025 rates and common mistakes

Where it goes

With Form 940. The schedule says "File this schedule with Form 940," and the total credit reduction goes on Form 940, line 11.

2025 credit reduction rates

Page 2 says the rate for California is 0.012 (1.2%) and the rate for the U.S. Virgin Islands is 0.045 (4.5%).

State reporting number

Page 2 notes that an employer without an unemployment account in a state where it paid wages contacts that state's unemployment agency to get one.

Common mistakes

The schedule cautions against including wages over the $7,000 wage base for each employee, wages excluded from state unemployment tax, or state unemployment wages in the FUTA Taxable Wages box.

Related forms

Who fills out Schedule A (Form 940)?

  • Employers filing Form 940

    The schedule says "File this schedule with Form 940" and identifies the employer by EIN and name (not the trade name).

  • Multi-state employers

    Example 2 on page 2 shows an employer that paid wages in more than one state completing Schedule A and filing it with Form 940.

  • Employers in a credit reduction state

    Step 2 says an employer is subject to credit reduction if it paid FUTA taxable wages that were also subject to state unemployment taxes in any listed state with a credit reduction rate greater than zero.

  • States with a zero rate

    Step 1 says to mark every state where state unemployment taxes were paid this year, including the District of Columbia, Puerto Rico and the U.S. Virgin Islands, even if the state's credit reduction rate is zero.

Employers complete it and file it with Form 940. The About Form 940 page says only employers pay FUTA tax and that it is not collected or deducted from employees' wages.

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Questions about Form 940

Who files Schedule A (Form 940)?

Employers file it with Form 940. The examples on page 2 show it used by an employer that paid wages in more than one state and by one that paid wages in a credit reduction state.

Which states had a credit reduction for 2025?

Page 2 gives a rate of 0.012 (1.2%) for California and 0.045 (4.5%) for the U.S. Virgin Islands.

Do I mark a state with a zero credit reduction rate?

Yes. Step 1 says to mark every state where state unemployment taxes were paid this year, even if the state's credit reduction rate is zero.

What is the FUTA wage base?

The schedule says the FUTA wage base for all states is $7,000.

Where does the total credit reduction go?

In the Total Credit Reduction box on Schedule A and on Form 940, line 11.

Is there a worked example?

Yes. Example 1 shows $21,000 of FUTA taxable wages in a state with a 0.012 rate, for a total credit reduction of $252.00.