Do I have to submit Form 940 if I don't have any employees yet?
I'm confused about the Form 940 filing requirement. I just started my small business this year, registered for an EIN, but haven't hired anyone yet. On one hand, the IRS website says: "You must file Form 940 only if you paid wages of $1,500 or more to employees in a calendar quarter or had one or more employees for at least some part of a day in any 20 or more different weeks." But then in another section it says: "If you receive a Form 940 and you weren't liable for FUTA tax for the year, check box C in the top right corner of the form. Then sign and return the form." I'm totally confused now. Do I need to submit a blank 940 with box C checked, or do I not need to submit anything at all since I literally have zero employees? I don't want to make a mistake that could cause problems later. Has anyone dealt with this before?
19 comments
Join the conversation
Felix Grigori
The good news is that if you truly had no employees and paid no wages, you generally don't have to file Form 940 at all. Form 940 is for reporting Federal Unemployment Tax Act (FUTA) tax, which only applies when you have employees. That second instruction is specifically for businesses that received a Form 940 in the mail from the IRS but don't actually have a filing requirement. The IRS sometimes automatically sends these forms to businesses with EINs because they don't know which ones have employees. If you didn't receive a physical Form 940 in the mail, you don't need to worry about checking box C or returning anything.
0 coins
Felicity Bud
So what happens if you registered for an EIN stating you would have employees (because you planned to), but then didn't end up hiring anyone that year? Would the IRS be expecting a 940 in that case?
0 coins
Felix Grigori
If you registered for an EIN and indicated you would have employees but didn't end up hiring anyone, the IRS might expect a 940, but you're still not required to file one if you had no employees and paid no wages. If the IRS sends you a Form 940, that's when you would check box C, sign it, and return it to let them know you had no FUTA tax liability. If they don't send you one, you don't need to do anything regarding Form 940 for that year.
0 coins
Max Reyes
After struggling with this exact same issue last year, I found an amazing tool that saved me tons of headaches with tax forms and filing requirements. Check out https://taxr.ai - they have a document analyzer that tells you exactly which forms apply to your situation. I uploaded the 940 instructions and asked if I needed to file with zero employees, and it gave me a clear explanation about the "check box C" situation and when it applies. Super helpful for sorting through confusing IRS language!
0 coins
Mikayla Davison
How does this actually work? Do you have to upload your business docs or just the tax forms you're confused about? I'm in a similar situation but with some contractors (not employees) and I'm getting mixed advice about 940/941 requirements.
0 coins
Adrian Connor
Is it worth it for just one question though? I feel like I could just call the IRS and ask them directly to be sure.
0 coins
Max Reyes
You just upload whatever documents you want analyzed - I uploaded the IRS instructions for Form 940 and asked my specific question. It pulls out the relevant information and explains it clearly without the confusing government language. The system can analyze any tax-related document. Definitely worth it for more than just one question! The IRS phone lines are notoriously difficult to get through, and when you do reach someone, the advice can be inconsistent. Having a tool that can instantly clarify any tax document has saved me hours of frustration.
0 coins
Mikayla Davison
Just wanted to follow up about that taxr.ai site someone mentioned earlier. I was skeptical but decided to try it because I was confused about contractor vs. employee reporting requirements. Uploaded my 1099 instructions and some IRS guidance about independent contractors. The analysis cleared up my confusion immediately! It highlighted the exact paragraphs that applied to my situation and explained in plain language what I needed to do. Definitely keeping this tool in my arsenal for tax season!
0 coins
Aisha Jackson
If you're still unsure and want definitive answers straight from the IRS, I'd recommend using Claimyr to actually get through to a human at the IRS. I used to spend HOURS on hold until I found https://claimyr.com - they somehow get you in the IRS phone queue without the wait. Check out their demo video here: https://youtu.be/_kiP6q8DX5c. I had a similar question about filing requirements for a side business I started, and they got me through to an agent in about 15 minutes who confirmed exactly what I needed to do.
0 coins
Ryder Everingham
Wait, how does this actually work? Seems suspicious that they can somehow skip the IRS phone lines when everyone else has to wait.
0 coins
Lilly Curtis
I'm pretty sure this is a scam. No way they can magically get you through to the IRS faster than everyone else. They probably just take your money and give you the same wait time you'd get anyway.
0 coins
Aisha Jackson
It's actually pretty straightforward - they use an automated system that continuously redials and navigates the IRS phone tree until they get through, then they call you and connect you to the agent. It's basically doing what you would do manually if you had unlimited time and patience. They're legitimate and have been featured in major media outlets. They don't claim to "skip" the line - they just handle the frustrating redial process for you so you don't have to keep your phone tied up for hours.
0 coins
Lilly Curtis
Ok I need to apologize for my skepticism about Claimyr. I was in a desperate situation with a tax notice about my business and decided to try it as a last resort. Not only did it work exactly as advertised, but I got through to an IRS agent in about 25 minutes instead of the 3+ hours I spent on my previous attempts. The agent confirmed I don't need to file Form 940 with no employees unless they specifically send me one. If you're dealing with confusing tax situations like this and need a definitive answer, it's absolutely worth getting through to an actual IRS representative.
0 coins
Leo Simmons
One important thing to consider is whether you've registered your business as an LLC or corporation that has elected to be taxed as an S-Corp. If you've made that election, you technically count as an employee (even if it's just yourself), and different rules may apply. This caught me off guard my first year!
0 coins
Savannah Glover
AuthorI did register as an LLC but didn't make an S-Corp election. Does that make a difference for Form 940 specifically?
0 coins
Leo Simmons
No, if you're just an LLC without the S-Corp election, then you're not considered an employee of your own business. In that case, the standard rules apply - no employees means no Form 940 requirement. If you had elected S-Corp status and were paying yourself a salary through payroll, then you would count as an employee and would need to file Form 940 (along with other employment tax forms).
0 coins
Lindsey Fry
I think everyone is overcomplicating this. If you have no employees, you don't file a 940, period. The only exception is if the IRS mails you one specifically - then you check box C and send it back. But they probably won't even send you one if you just got your EIN this year.
0 coins
Saleem Vaziri
This is correct. I've run my business for 5 years and only ever filed 940 when I actually had employees. Never had an issue.
0 coins
Jacinda Yu
Thanks everyone for the helpful responses! This has been really confusing me since I got my EIN. Just to clarify my situation - I'm a solo LLC (no S-Corp election) and literally have zero employees, zero wages paid, zero payroll activity. Based on what everyone is saying, it sounds like I don't need to file Form 940 at all unless the IRS specifically mails me one, which they probably won't since I just got my EIN this year. I feel much better about this now. It's frustrating how the IRS instructions can be so confusing when the actual answer seems pretty straightforward!
0 coins