What This Notice Means
The IRS received your Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. You aren't required to file it. The IRS determined your organization is exempt under Section 501(c)(3) of the Internal Revenue Code.
What to Do
- Don't file Form 940.
- Don't make any deposits for federal unemployment tax.
Make sure whoever runs your payroll knows. If a payroll provider or software files Form 940 for you automatically, have it stopped. Give them a copy of this notice for their file.
Form 941 Is Still Required
The exemption covers federal unemployment tax only. 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, explains your deposit and filing duties.
Withheld taxes are where nonprofits get into the most trouble. Keep those deposits current.
Refund of FUTA Deposits
If you made deposits for Form 940, request a refund on Form 843, Claim for Refund and Request for Abatement. List each deposit's date and amount so the IRS can match them.
State Unemployment Tax
This notice doesn't address state unemployment tax. Contact your state to find out whether you're required to make contributions under the state unemployment compensation law.
If You Disagree
Call the number on your notice. Either way, keep the notice with your organization's permanent records.
If your nonprofit has fallen behind on payroll taxes or received other IRS notices, call us at (813) 229-7100.