Certified Payroll Professional Practice Exam

Which form is used by employers to report annual federal unemployment tax liability?

1. Form W-4S

2. Form 940

3. Form 941

4. Form I-9

The correct answer is: Form 940

Form 940 is used by employers to report their annual federal unemployment tax liability. This form is submitted by employers to the Internal Revenue Service (IRS) at the end of each calendar year to report the amount of unemployment tax owed on the wages paid to employees during the year. Form 940 is specifically designed to report the employer's annual Federal Unemployment Tax Act (FUTA) tax liability. Options A, C, and D are incorrect: - Form W-4S is used by employees to request federal income tax withholding from sick pay. - Form 941 is used by employers to report quarterly federal payroll taxes, such as income tax withholding, Social Security tax, and Medicare tax. - Form I-9 is used for employment eligibility verification, not for reporting federal unemployment tax liability.