Caution:

FUTA tax doesn’t apply to employers in American Samoa, Guam, and the CNMI, but it does apply to employers in the USVI and Puerto Rico. Services rendered to a federally recognized Indian tribal government (or any subdivision, subsidiary, or business wholly owned by such an Indian tribe) are exempt from FUTA tax, subject to the tribe’s compliance with state law. For more information, see section 3309(d) and Pub. 4268.

The Federal Unemployment Tax Act (FUTA), with state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs. Most employers pay both a federal and a state unemployment tax. For a list of state unemployment agencies, go to the U.S. Department of Labor’s website at oui.doleta.gov/unemploy/agencies.asp . Only the employer pays FUTA tax; it isn’t withheld from the employee’s wages. For more information, see the Instructions for Form 940.

Who must pay?

Use the following three tests to determine whether you must pay FUTA tax. Each test applies to a different category of employee, and each is independent of the others. If a test describes your situation, you’re subject to FUTA tax on the wages you pay to employees in that category during the current calendar year.

General test. You’re subject to FUTA tax in 2026 on the wages you pay employees who aren’t farmworkers or household workers if: You paid wages of $1,500 or more in any calendar quarter in 2025 or 2026, or You had one or more employees for at least some part of a day in any 20 or more different weeks in 2025 or 20 or more different weeks in 2026.

Household employees test. You’re subject to FUTA tax in 2026 if you paid total cash wages of $1,000 or more to household employees in any calendar quarter in 2025 or 2026. A household employee is an employee who performs household work in a private home, local college club, or local fraternity or sorority chapter.

Farmworkers test. You’re subject to FUTA tax in 2026 on the wages you pay to farmworkers if: You paid cash wages of $20,000 or more to farmworkers during any calendar quarter in 2025 or 2026, or You employed 10 or more farmworkers during at least some part of a day (whether or not at the same time) during any 20 or more different weeks in 2025 or 20 or more different weeks in 2026.

To determine whether you meet either test above for farmworkers, you must count wages paid to aliens admitted on a temporary basis to the United States to perform farmwork, also known as H-2A visa workers. However, wages paid to H-2A visa workers aren’t subject to FUTA tax.

Generally, farmworkers supplied by crew leaders , as defined earlier in section 2, are considered employees of the farm operator for purposes of the FUTA tax unless (a) the crew leader is registered under the Migrant and Seasonal Agricultural Worker Protection Act; or (b) substantially all of the workers supplied by the crew leader operate or maintain tractors, harvesting or crop-dusting machines, or other machines provided by the crew leader. Therefore, if (a) or (b) applies, the farmworkers are generally employees of the crew leader.

Figuring FUTA tax.

For 2026, the FUTA tax rate is 6.0%. The tax applies to the first $7,000 you pay to each employee as wages during the year. The $7,000 is the federal wage base. Your state wage base limit may be different.

Generally, you can take a credit against your FUTA tax for amounts you paid into state unemployment funds. The credit may be as much as 5.4% of FUTA taxable wages. If you’re entitled to the maximum 5.4% credit, the FUTA tax rate after credit is 0.6%. You’re entitled to the maximum credit if you paid your state unemployment taxes in full, on time, and on all the same wages as are subject to FUTA tax, and as long as the state isn’t determined to be a credit reduction state. See the Instructions for Form 940 to determine the credit.

In some states, the wages subject to state unemployment tax are the same as the wages subject to FUTA tax. However, certain states exclude some types of wages from state unemployment tax, even though they’re subject to FUTA tax (for example, wages paid to corporate officers, certain payments of sick pay by unions, and certain fringe benefits). In such a case, you may be required to deposit more than 0.6% FUTA tax on those wages. See the Instructions for Form 940 for further guidance.

Successor employer.

If you acquired a business from an employer who was liable for FUTA tax, you may be able to count the wages that employer paid to the employees who continue to work for you when you figure the $7,000 FUTA tax wage base limit. See the Instructions for Form 940.

Depositing FUTA tax.

For deposit purposes, figure FUTA tax quarterly. Determine your FUTA tax liability by multiplying the amount of taxable wages paid during the quarter by 0.6%. This amount may need to be adjusted, however, depending on your entitlement to the credit for state unemployment contributions. See the Instructions for Form 940. Stop depositing FUTA tax on an employee’s wages when taxable wages reach $7,000 for the calendar year.

If your FUTA tax liability for any calendar quarter is $500 or less, you don’t have to deposit the tax. Instead, you may carry it forward and add it to the liability figured in the next quarter to see if you must make a deposit. If your FUTA tax liability for any calendar quarter is over $500 (including any FUTA tax carried forward from an earlier quarter), you must deposit the tax by EFT. See section 11 for more information on EFTs.

Household employees.

You’re not required to deposit FUTA taxes for household employees unless you report their wages on Forms 941, Form 943, or Form 944. See Pub. 926 for more information.

When to deposit.

Deposit the FUTA tax by the last day of the first month that follows the end of the quarter. If the due date for making your deposit falls on a Saturday, Sunday, or legal holiday, you may make your deposit on the next business day. See Legal holiday in section 11 for a list of legal holidays occurring in 2026.

If your liability for the fourth quarter (plus any undeposited amount from any earlier quarter) is over $500, deposit the entire amount by the due date of Form 940 (January 31). If it is $500 or less, you can make a deposit, pay the tax with a credit or debit card, or pay the tax with your Form 940 by January 31. If you file Form 940 electronically, you can e-file and use EFW to pay the balance due. For more information on paying your taxes with a credit or debit card or using EFW, go to IRS.gov/Pay .