Caution:

In years when there are credit reduction states, you must include liabilities owed for credit reduction with your fourth quarter deposit. You may deposit the anticipated extra liability throughout the year, but it isn’t due until the due date for the deposit for the fourth quarter, and the associated liability should be recorded as being incurred in the fourth quarter. See the Instructions for Form 940 for more information.

Table 4. When To Deposit FUTA Taxes

Quarter Ending Due date Jan.–Feb.–Mar. Mar. 31 Apr. 30 Apr.–May–June June 30 July 31 July–Aug.–Sept. Sept. 30 Oct. 31 Oct.–Nov.–Dec. Dec. 31 Jan. 31

Reporting FUTA tax.

Use Form 940 to report FUTA tax. File your 2025 Form 940 by February 2, 2026. However, if you deposited all FUTA tax when due, you may file on or before February 10, 2026.

Form 940 e-file.

The Form 940 e-file program allows a taxpayer to electronically file an original Form 940 and an amended Form 940. For more information, go to IRS.gov/EmploymentEfile or call 866-255-0654.

Household employees.

If you didn’t report employment taxes for household employees on Forms 941, Form 943, or Form 944, report FUTA tax for these employees on Schedule H (Form 1040). See Pub. 926 for more information. You must have an EIN to file Schedule H (Form 1040).

Electronic filing by reporting agents.

Reporting agents filing Forms 940 for groups of taxpayers can file them electronically. See Electronic filing by reporting agents in section 12.

Electronic filing by CPEOs.

CPEOs are required to electronically file Form 940 with Schedule R (Form 940). Under certain circumstances, the IRS may waive the electronic filing requirement. To request a waiver, the CPEO must file a written request using the IRS Online Registration System for Professional Employer Organizations at least 45 days before the due date of the return for which the CPEO is unable to electronically file. For more information on filing a waiver request electronically, go to IRS.gov/CPEO . Also see Revenue Procedure 2023-18 .

15. Special Rules for Various Types of Services and Payments

Section references are to the Internal Revenue Code unless otherwise noted.

Special classes of employment and special types of payments Treatment under employment taxes Federal income tax withholding Social security and Medicare (including Additional Medicare Tax when wages are paid in excess of $200,000) FUTA Agricultural labor: 1. Service on farm in connection with cultivating soil; raising or harvesting any agricultural or horticultural commodity; the care of livestock, poultry, bees, fur-bearing animals, or wildlife. Taxable if wages subject to social security tax and Medicare tax. Taxable if $150 test or $2,500 test in section 9 is met. Taxable if either test in section 14 is met. 2. Service in employ of owner or operator of farm if major part of the services are performed on farm; in management or maintenance, etc., of farm, tools, or equipment; or in salvaging timber; or clearing brush and other debris left by hurricane. Taxable if wages subject to social security tax and Medicare tax. Taxable if $150 test or $2,500 test in section 9 is met. Taxable if either test in section 14 is met. 3. In connection with the production and harvesting of turpentine and other oleoresinous products. Taxable if wages subject to social security tax and Medicare tax. Taxable if $150 test or $2,500 test in section 9 is met. Taxable if either test in section 14 is met. 4. Cotton ginning. Taxable if wages subject to social security tax and Medicare tax. Taxable if $150 test or $2,500 test in section 9 is met. 1 Taxable if either test in section 14 is met. 5. In connection with hatching of poultry. Taxable if wages subject to social security tax and Medicare tax. Taxable if $150 test or $2,500 test in section 9 is met (not farmwork if performed off farm). Taxable if either test in section 14 is met. 6. In operation or maintenance of ditches, canals, reservoirs, or waterways used only for supplying or storing water for farming purposes and not owned or operated for profit. Taxable if wages subject to social security tax and Medicare tax. Taxable if $150 test or $2,500 test in section 9 is met. Taxable if either test in section 14 is met. 7. In processing, packaging, delivering, etc., any agricultural or horticultural commodity in its unmanufactured state: a. In employ of farm operator. Taxable if wages subject to social security tax and Medicare tax. If operator produced over half of commodity processed, taxable if $150 test or $2,500 test in section 9 is met; otherwise taxable (not farmwork). 1 If employer produced over half of commodity processed, taxable if either test in section 14 is met; otherwise taxable (not farmwork). b. In employ of unincorporated group of farm operators (never more than 20). Taxable if wages subject to social security tax and Medicare tax. If group produced all commodity processed, taxable if $150 test or $2,500 test in section 9 is met; otherwise taxable (not farmwork). 1 If employer produced over half of commodity processed, taxable if either test in section 14 is met; otherwise taxable (not farmwork). c. In employ of other groups of farm operators (including cooperative organizations and commercial handlers). Taxable if wages subject to social security tax and Medicare tax. Taxable (not farmwork). 1 If employer produced over half of commodity processed, taxable if either test in section 14 is met; otherwise taxable (not farmwork). 8. Handling or processing commodities after delivery to terminal market for commercial canning or freezing. Taxable if wages subject to social security tax and Medicare tax. Taxable (not farmwork). 1 Taxable (not farmwork). Aliens: 1. Resident: a. Service performed in the United States. 2 Same as U.S. citizen. Same as U.S. citizen. (Exempt if any part of service as crew member of foreign vessel or aircraft is performed outside the United States.) Same as U.S. citizen. 1 Wages for services not considered farmwork are reported on Forms 941 or Form 944. Other exemptions may apply. See section 5 and section 13 . 2 Benefits provided under cafeteria plans may qualify for exclusion from wages for social security, Medicare, and FUTA taxes. Aliens (continued) : b. Service performed outside the United States. 2 Withhold. Taxable if (1) working for an American employer, or (2) an American employer by agreement covers U.S. citizens and residents employed by its foreign affiliates or subsidiary of an American employer. Exempt unless on or in connection with an American vessel or aircraft and either performed under contract made in United States, or alien is employed on such vessel or aircraft when it touches U.S. port. 2. Nonresidents working in the United States. 3 a. Workers lawfully admitted under section 101(a)(15)(H)(ii)(a) of the Immigration and Nationality Act on a temporary basis to perform agricultural labor (“H-2A” workers). See Pub. 515 and Pub. 519. Exempt. Exempt. b. Student, scholar, trainee, teacher, etc., as nonimmigrant alien under section 101(a)(15)(F), (J), (M), or (Q). See Pub. 515 and Pub. 519. Exempt if service is performed for purposes specified in section 101(a)(15)(F), (J), (M), or (Q) of the Immigration and Nationality Act. However, these taxes may apply if the employee becomes a resident alien. c. Philippine resident not admitted to Guam or CNMI under section 101(a)(15)(H)(ii) of the Immigration and Nationality Act. See Pub. 515 and Pub. 519. Exempt if service is performed for purposes specified in section 101(a)(15)(H)(ii) of the Immigration and Nationality Act. However, these taxes may apply if the employee becomes a resident alien. d. Philippine resident not admitted to CNMI under section 101(a)(15)(H)(ii) of the Immigration and Nationality Act for services performed in the CNMI on or after January 1, 2015. See Pub. 515 and Pub. 519. Taxable. Exempt. e. Korean resident admitted to Guam under section 101(a)(15)(H)(ii) of the Immigration and Nationality Act. See Pub. 515 and Pub. 519. Exempt if service is performed for purposes specified in section 101(a)(15)(H)(ii) of the Immigration and Nationality Act. However, these taxes may apply if the employee becomes a resident alien. Exempt. f. Korean resident admitted to CNMI under section 101(a)(15)(H)(ii) of the Immigration and Nationality Act. See Pub. 515 and Pub. 519. Taxable. Exempt. g. All other nonresidents working in United States. 3 See Pub. 515 and Pub. 519. Same as U.S. citizen; exempt if any part of service as crew member of foreign vessel or aircraft is performed outside United States and employer isn’t an American employer. Same as U.S. citizen. 3. Nonresident working on American vessel or aircraft outside United States. 3 See Pub. 515 and Pub. 519. Taxable if under contract made in the United States or worker is employed on vessel or aircraft when it touches U.S. port. Cafeteria plan benefits under section 125. If employee chooses cash or other taxable benefit, subject to all employment taxes. If employee chooses a nontaxable benefit, the treatment is the same as if the benefit was provided outside the plan. See Pub. 15-B for more information. Deceased worker: 1. Wages paid to beneficiary or estate in same calendar year as worker’s death. See the General Instructions for Forms W-2 and W-3 for details. Exempt. Taxable. Taxable. 2. Wages paid to beneficiary or estate after calendar year of worker’s death. Exempt. Exempt. Exempt. Dependent care assistance programs. Exempt to the extent it is reasonable to believe amounts are excludable from gross income under section 129. 2 Benefits provided under cafeteria plans may qualify for exclusion from wages for social security, Medicare, and FUTA taxes. 3 The United States includes American Samoa, Guam, the CNMI, the USVI, and Puerto Rico. Disabled worker’s wages paid after year in which worker became entitled to disability insurance benefits under the Social Security Act. Withhold. Exempt if worker didn’t perform any service for employer during the period for which payment is made. Taxable. Employee business expense reimbursement: 1. Accountable plan. a. Amounts not exceeding specified government rate for per diem or standard mileage. Exempt. Exempt. Exempt. b. Amounts in excess of specified government rate for per diem or standard mileage. Withhold. Taxable. Taxable. 2. Nonaccountable plan. See section 5 for details. Withhold. Taxable. Taxable. Family employees: 1. Child employed by parent (or partnership in which each partner is a parent of the child). Withhold. Exempt until age 18; age 21 for domestic service. Exempt until age 21. 2. Parent employed by child. Withhold. Taxable if in course of the child’s business. For domestic services, see section 3 . Exempt. 3. Spouse employed by spouse. Withhold. Taxable if in course of spouse’s business. Exempt. See section 3 for more information. Fishing and related activities; employment in connection with catching, harvesting, farming, etc.: 1. Salmon or halibut. Taxable unless (3) applies. Taxable unless (3) applies. Taxable unless (3) applies. 2. All other aquatic forms of animal and vegetable life. Taxable unless (3) applies. Taxable unless (3) applies. Exempt unless on vessel of more than 10 net tons and (3) doesn’t apply. 3. An arrangement with the owner or operator of the boat by which the individual receives a share of the boat’s catch (or proceeds from the sale of the catch), the share depending on the boat’s catch, and operating crew of the boat is normally fewer than 10 individuals. 4 Exempt. Exempt if any cash remuneration is: (a) $100 or less, (b) Contingent on minimum catch, and (c) Paid solely for additional duties (such as mate, engineer, or cook for which cash remuneration is traditional). Foreign governments and international organizations. Exempt. Exempt. Exempt. Foreign service by U.S. citizens: 1. As U.S. Government employees. Withhold. Same as within the United States. Exempt. 2. For foreign affiliates of American employers and other private employers. Exempt if at time of payment (1) it is reasonable to believe employee is entitled to exclusion from income under section 911, or (2) the employer is required by law of the foreign country to withhold income tax on such payment. Exempt unless (1) an American employer by agreement covers U.S. citizens employed by its foreign affiliates, or (2) U.S. citizen works for American employer. Exempt unless (1) on American vessel or aircraft and work is performed under contract made in the United States or worker is employed on vessel when it touches U.S. port, or (2) U.S. citizen works for American employer (except in a contiguous country with which the United States has an agreement for unemployment compensation) or in the USVI. 4 Income derived by Native Americans exercising fishing rights is generally exempt from employment taxes. Fringe benefits. Taxable on excess of fair market value of the benefit over the sum of an amount paid for it by the employee and any amount excludable by law. However, special valuation rules may apply. Benefits provided under cafeteria plans may qualify for exclusion from wages for social security, Medicare, and FUTA taxes. See Pub. 15-B for details. Government employment: 1. State/local governments and political subdivisions, employees of: a. Salaries and wages (includes payments to most elected and appointed officials). See chapter 3 of Pub. 963. Withhold. Generally, taxable for (1) services performed by employees who are either (a) covered under a section 218 agreement, or (b) not covered under a section 218 agreement and not a member of a public retirement system (mandatory social security and Medicare coverage); and (2) (for Medicare tax only) for services performed by employees hired or rehired after March 31, 1986, who aren’t covered under a section 218 agreement or the mandatory social security provisions, unless specifically excluded by law. See Pub. 963. Exempt. b. Election workers. Election individuals are workers who are employed to perform services for state or local governments at election booths in connection with national, state, or local elections. Exempt. Taxable if paid $2,500 or more in 2026 (lesser amount if specified by a section 218 social security agreement). See Revenue Ruling 2000-6. Exempt. Note: File Form W-2 for payments of $600 or more in 2025 ($2,000 or more in 2026) even if no social security or Medicare tax was withheld. c. Emergency workers. Emergency workers who were hired on a temporary basis in response to a specific unforeseen emergency and aren’t intended to become permanent employees. Withhold. Exempt if serving on a temporary basis in case of fire, storm, snow, earthquake, flood, or similar emergency. Exempt. 2. U.S. federal government employees. Withhold. Taxable for Medicare. Taxable for social security unless hired before 1984. See section 3121(b)(5). Exempt unless worker is a seaman performing services on or in connection with American vessel owned by or chartered to the United States and operated by general agent of Secretary of Commerce. Homeworkers (industrial, cottage industry): 1. Common law employees. Withhold. Taxable. Taxable. 2. Statutory employees. See section 2 for details. Exempt. Taxable if paid $100 or more in cash in a year. Exempt. Hospital employees: 1. Interns. Withhold. Taxable. Exempt. 2. Patients. Withhold. Taxable (Exempt for state or local government hospitals.) Exempt. Household employees: 1. Domestic service in private homes. Exempt (withhold if both employer and employee voluntarily agree). Taxable if paid $3,000 or more in cash in 2026. Exempt if performed by an individual under age 18 during any portion of the calendar year and isn’t the principal occupation of the employee. Taxable if employer paid total cash wages of $1,000 or more in any quarter in the current or preceding calendar year. 2. Domestic service in college clubs, fraternities, and sororities. Exempt (withhold if both employer and employee voluntarily agree). Exempt if paid to regular student; also exempt if employee is paid less than $100 in a year by an income-tax-exempt employer. Taxable if employer paid total cash wages of $1,000 or more in any quarter in the current or preceding calendar year. Insurance for employees: 1. Accident and health insurance premiums under a plan or system for employees and their dependents generally or for a class or classes of employees and their dependents. Exempt (except 2% shareholder-employees of S corporations). Exempt. Exempt. 2. Group-term life insurance costs. See Pub. 15-B for details. Exempt. Exempt, except for the cost of group-term life insurance includible in the employee’s gross income. Special rules apply for former employees. Exempt. Insurance agents or solicitors: 1. Full-time life insurance salesperson. Withhold only if employee under common law. See section 2 . Taxable. Taxable if (1) employee under common law, and (2) not paid solely by commissions. 2. Other salesperson of life, casualty, etc., insurance. Withhold only if employee under common law. Taxable only if employee under common law. Taxable if (1) employee under common law, and (2) not paid solely by commissions. Interest on loans with below-market interest rates (foregone interest and deemed original issue discount). See Pub. 15-A. Leave-sharing plans: Amounts paid to an employee under a leave-sharing plan. Withhold. Taxable. Taxable. Overtime compensation. Withhold. 5 Taxable. Taxable. Newspaper carriers and vendors: Newspaper carriers under age 18; newspaper and magazine vendors buying at fixed prices and retaining receipts from sales to customers. See Pub. 15-A for information on statutory nonemployee status. Exempt (withhold if both employer and employee voluntarily agree). Exempt. Exempt. Noncash payments: 1. For household work, agricultural labor, and service not in the course of the employer’s trade or business. Exempt (withhold if both employer and employee voluntarily agree). Exempt. Exempt. 2. To certain retail commission salespersons ordinarily paid solely on a cash commission basis. Optional with employer, except to the extent employee’s supplemental wages during the year exceed $1 million. Taxable. Taxable. Nonprofit organizations. See Pub. 15-A. Officers or shareholders of an S corporation: Distributions and other payments by an S corporation to a corporate officer or shareholder must be treated as wages to the extent the amounts are reasonable compensation for services to the corporation by an employee. See the Instructions for Form 1120-S. Withhold. Taxable. Taxable. 5 See Overtime compensation in section 5. Partners: Payments to general or limited partners of a partnership. See Pub. 541 for partner reporting rules. Exempt. Exempt. Exempt. Railroads: Payments subject to the Railroad Retirement Act. See Pub. 915 and the Instructions for Form CT-1 for more details. Withhold. Exempt. Exempt. Religious exemptions. See Pub. 15-A and Pub. 517. Retirement and pension plans: 1. Employer contributions to a qualified plan. Exempt. Exempt. Exempt. 2. Elective employee contributions and deferrals to a plan containing a qualified cash or deferred compensation arrangement (401(k)). Generally exempt, but see section 402(g) for limitation. Taxable. Taxable. 3. Employer contributions to individual retirement accounts under simplified employee pension (SEP) plan. Generally exempt, but see section 402(g) for salary reduction SEP limitation. Exempt, except amounts contributed through a salary reduction agreement are taxable. 4. Employer contributions to section 403(b) annuities including salary reduction contributions. Generally exempt, but see section 402(g) for limitation. Exempt, except amounts contributed through a salary reduction agreement are taxable. 5. Employee salary reduction contributions to a SIMPLE retirement account. Exempt. Taxable. Taxable. 6. Distributions from qualified retirement and pension plans and section 403(b) annuities. See Pub. 15-A for information on pensions, annuities, and employer contributions to nonqualified deferred compensation arrangements. Withhold, but recipient may elect exemption on Form W-4P in certain cases; mandatory 20% withholding applies to an eligible rollover distribution that isn’t a direct rollover; exempt for direct rollover. See Pub. 15-A. Exempt. Exempt. 7. Employer contributions to a section 457(b) plan. Generally exempt, but see section 457(b) limitation. Taxable. Taxable. 8. Employee salary reduction contributions to a section 457(b) plan. Generally exempt, but see section 457(b) limitation. Taxable. Taxable. Salespersons: 1. Common law employees. Withhold. Taxable. Taxable. 2. Statutory employees. Exempt. Taxable. Taxable, except for full-time life insurance sales agents. 3. Statutory nonemployees (qualified real estate agents, direct sellers, and certain companion sitters). See Pub. 15-A for details. Exempt. Exempt. Exempt. Scholarships and fellowship grants (includible in income under section 117(c)). Withhold. Taxability depends on the nature of the employment and the status of the organization. See Students, scholars, trainees, teachers, etc., below. Severance or dismissal pay. Withhold. Taxable. Taxable. Service not in the course of the employer’s trade or business (other than on a farm operated for profit or for household employment in private homes). Withhold only if employee earns $50 or more in cash in a quarter and works on 24 or more different days in that quarter or in the preceding quarter. Taxable if employee receives $100 or more in cash in a calendar year. Taxable only if employee earns $50 or more in cash in a quarter and works on 24 or more different days in that quarter or in the preceding quarter. Sick pay. See Pub. 15-A for more information. Withhold. Exempt after end of 6 calendar months after the calendar month employee last worked for employer. Students, scholars, trainees, teachers, etc.: 1. Student enrolled and regularly attending classes, performing services for the following. a. Private school, college, or university. Withhold. Exempt. Exempt. Students, scholars, trainees, teachers, etc. (continued) : b. Auxiliary nonprofit organization operated for and controlled by school, college, or university. Withhold. Exempt unless services are covered by a section 218 (Social Security Act) agreement. Exempt. c. Public school, college, or university. Withhold. Exempt unless services are covered by a section 218 (Social Security Act) agreement. Exempt. 2. Full-time student performing service for academic credit, combining instruction with work experience as an integral part of the program. Withhold. Taxable. Exempt unless program was established for or on behalf of an employer or group of employers. 3. Student nurse performing part-time services for nominal earnings at hospital as incidental part of training. Withhold. Exempt. Exempt. 4. Student employed by organized camps. Withhold. Taxable. Exempt. 5. Student, scholar, trainee, teacher, etc., as nonimmigrant alien under section 101(a)(15)(F), (J), (M), or (Q) of Immigration and Nationality Act (that is, aliens holding F-1, J-1, M-1, or Q-1 visas). Withhold unless excepted by regulations. Exempt if service is performed for purpose specified in section 101(a)(15)(F), (J), (M), or (Q) of Immigration and Nationality Act. However, these taxes may apply if the employee becomes a resident alien. See the special residency tests for exempt individuals in chapter 1 of Pub. 519. Supplemental unemployment compensation plan benefits. Withhold. Exempt under certain conditions. See Pub. 15-A. Territory government employees (other than federal): (See section 3121(b)(7)) or go to SSA.gov . 1. USVI. Exempt. Taxable if covered by section 218 agreement with SSA. Exempt. 2. American Samoa and political subdivisions. Exempt. Taxable, unless employee covered by a retirement system. Exempt. 3. Guam. Exempt. Exempt, except for certain temporary and intermittent employees. Exempt. 4. The CNMI and political subdivisions. Exempt. Taxable (beginning in the fourth calendar quarter of 2012). Exempt. Tips: 1. If $20 or more in a month. Withhold. 6 Taxable. Taxable for all tips reported in writing to employer. 2. If less than $20 in a month. See section 6 for more information. Exempt. Exempt. Exempt. Workers’ compensation. Exempt. Exempt. Exempt. 6 See Federal income tax withholding on tips in section 6.