940 SCH A Multi-State Employer and Credit Reduction Information

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Schedule A (Form 940) for 2023:

860312

Multi-State Employer and Credit Reduction Information

OMB No. 1545-0028

Department of the Treasury — Internal Revenue Service

See the
instructions on
page 2. File this
schedule with
Form 940.

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Employer identification number (EIN)

TREASURY/IRS
AND OMB USE
ONLY DRAFT
November 20, 2023
DO NOT FILE
Name (not your trade name)

Place an “X” in the box of EVERY state in which you had to pay state unemployment tax this year. For each state with a
credit reduction rate greater than zero, enter the FUTA taxable wages, multiply by the reduction rate, and enter the credit
reduction amount. Don’t include in the FUTA Taxable Wages box wages that were excluded from state unemployment tax
(see the instructions for Step 2). If any states don’t apply to you, leave them blank.

Postal
Abbreviation

AK

AL
AR
AZ
CA

CO

CT
DC

DE
FL
GA
HI
IA
ID
IL
IN
KS
KY
LA
MA
MD
ME
MI
MN
MO
MS
MT

FUTA
Taxable Wages

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Reduction
Rate

Credit Reduction

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Postal
Abbreviation

FUTA
Taxable Wages

NC
ND
NE
NH
NJ

NM

NV
NY

OH
OK
OR
PA

RI

SC
SD
TN
TX
UT
VA
VT
WA
WI
WV
WY
PR
VI

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Reduction
Rate

Total Credit Reduction. Add all amounts shown in the Credit Reduction boxes. Enter the total
here and on Form 940, line 11
. . . . . . . . . . . . . . . . . . . . . .
For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 940.

Cat. No. 16997C

Credit Reduction

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Schedule A (Form 940) 2023

Instructions for Schedule A (Form 940) for 2023:

860412

Multi-State Employer and Credit Reduction Information
Specific Instructions: Completing Schedule A
Step 1. Place an “X” in the box of every state (including the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands) in
which you had to pay state unemployment taxes this year, even
if the state’s credit reduction rate is zero.

Note: Don’t enter your state unemployment wages in the FUTA
Taxable Wages box.

Note: Make sure that you have applied for a state reporting number
for your business. If you don’t have an unemployment account in a
state in which you paid wages, contact the state unemployment
agency to receive one. For a list of state unemployment agencies,
visit the U.S. Department of Labor’s website at
https://oui.doleta.gov/unemploy/agencies.asp.

Enter your total in the Credit Reduction box at the end of the line.

TREASURY/IRS
AND OMB USE
ONLY DRAFT
November 20, 2023
▲
DO NOT FILE
The table below provides the two-letter postal abbreviations used
on Schedule A.
State

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia

Postal
Abbreviation
AL
AK
AZ
AR
CA
CO
CT
DE
DC

State

Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota

Postal
Abbreviation
MT
NE
NV
NH
NJ
NM
NY
NC
ND

Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky

FL
GA
HI
ID
IL
IN
IA
KS
KY

Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas

OH
OK
OR
PA
RI
SC
SD
TN
TX

Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri

LA
ME
MD
MA
MI
MN
MS
MO

Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Puerto Rico
U.S. Virgin Islands

UT
VT
VA
WA
WV
WI
WY
PR
VI

Credit reduction states for 2023. The credit reduction rate for
California and New York is 0.006 (0.6%). The credit reduction rate
for the U.S. Virgin Islands is 0.039 (3.9%).
Step 2. You’re subject to credit reduction if you paid FUTA
taxable wages that were also subject to state unemployment
taxes in any state listed that has a credit reduction rate greater
than zero.
In the FUTA Taxable Wages box, enter the total FUTA taxable
wages that you paid in any state that is subject to credit reduction.
(The FUTA wage base for all states is $7,000.) However, don’t
include in the FUTA Taxable Wages box wages that were excluded
from state unemployment tax. For example, if you paid $5,000 in
FUTA taxable wages in a credit reduction state but $1,000 of those
wages was excluded from state unemployment tax, report $4,000 in
the FUTA Taxable Wages box.

Page 2

Enter the reduction rate and then multiply the total FUTA taxable
wages by the reduction rate.
Step 3. Total credit reduction

To calculate the total credit reduction, add up all of the Credit
Reduction boxes and enter the amount in the Total Credit
Reduction box.
Then enter the total credit reduction on Form 940, line 11.
Example 1

You paid $20,000 in wages to each of three employees in State A.
State A is subject to credit reduction at a rate of 0.006 (0.6%).
Because you paid wages in a state that is subject to credit
reduction, you must complete Schedule A and file it with Form 940.
Total payments to all employees in State A

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. $60,000

Payments exempt from FUTA tax
(see the Instructions for Form 940) .

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Total payments made to each employee in
excess of $7,000 (3 x ($20,000 - $7,000)) .

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. $39,000

Total FUTA taxable wages you paid in State A entered in
the FUTA Taxable Wages box ($60,000 - $0 - $39,000) .

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. $21,000

Credit reduction rate for State A .

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$0

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Total credit reduction for State A ($21,000 x 0.006) .

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. $126.00

0.006

Don’t include in the FUTA Taxable Wages box wages in
excess of the $7,000 wage base for each employee
subject to state unemployment insurance in the credit
CAUTION
reduction state. The credit reduction applies only to
FUTA taxable wages that were also subject to state unemployment
tax.

!

In this case, you would enter $126.00 in the Total Credit Reduction
box and then enter that amount on Form 940, line 11.
Example 2

You paid $48,000 ($4,000 a month) in wages to Mary Smith and no
payments were exempt from FUTA tax. Mary worked in State B (not
subject to credit reduction) in January and then transferred to State
C (subject to credit reduction) on February 1. Because you paid
wages in more than one state, you must complete Schedule A and
file it with Form 940.
The total payments in State B that aren’t exempt from FUTA tax are
$4,000. Because this payment to Mary doesn’t exceed the $7,000
FUTA wage base, the total FUTA taxable wages paid in State B are
$4,000.
The total payments in State C that aren’t exempt from FUTA tax are
$44,000. However, $4,000 of FUTA taxable wages was paid in State
B with respect to Mary. Therefore, the total FUTA taxable wages
with respect to Mary in State C are $3,000 ($7,000 (FUTA wage
base) - $4,000 (total FUTA taxable wages paid in State B)). Enter
$3,000 in the FUTA Taxable Wages box, multiply it by the reduction
rate, and then enter the result in the Credit Reduction box.
Attach Schedule A to Form 940 when you file your return.