What This Notice Means

The IRS received your Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, but you don't need to file it. Churches and certain religious organizations are exempt from paying federal unemployment tax.

What to Do

  • Don't file Form 940.
  • Don't make deposits for federal unemployment tax.

If a payroll company handles your payroll, give them a copy of this notice. Payroll systems often file Form 940 and make FUTA deposits by default. Get that switched off so it doesn't happen again.

You Still Have Payroll Filings

Being exempt from FUTA doesn't end your other payroll obligations. You must still file Form 941, Employer's Quarterly Federal Tax Return, for federal income tax and other amounts withheld from employees' compensation. Publication 15, (Circular E), Employer's Tax Guide, covers the details.

Getting Back FUTA Deposits

If you already made deposits for Form 940, you can request a refund by filing Form 843, Claim for Refund and Request for Abatement. Have the dates and amounts of each FUTA deposit ready. Keep a copy of the claim and proof of mailing.

State Unemployment Tax

Federal and state unemployment rules are separate. Contact your state to find out whether your church or organization must make contributions under the state unemployment compensation law.

If You Disagree

Call the number on your notice. Keep this notice in your permanent payroll records. It's the IRS's written determination that you don't need to file Form 940.

If your church or ministry has other IRS payroll issues, call us at (813) 229-7100.