Schedule A (Form 940) – Multi‑State FUTA Credit Reduction Schedule (2026)

Schedule A (Form 940) – Multi‑State Employer and Credit Reduction Information

Last reviewed: 2025-10-26

Use the Schedule A (Form 940sa) Tax Form Calculator Schedule A (Form 940sa) as a stand alone tax form calculator to quickly calculate specific amounts for your 2026 940sa state tax return. Alternatively, you can use one of our Combined Federal and State Tax Estimators to quickly calculate your salary, tax, and take-home pay.

Employers who paid unemployment tax in more than one state or any FUTA credit reduction states must complete and attach Schedule A (Form 940). This schedule helps determine how much FUTA credit can be claimed and flags any additional liability arising from credit reduction.

Key filing rules for Schedule A:

Multi‑state employers must check box a on Form 940 and list all states where wages were subject to unemployment tax.

If you paid wages in any credit reduction states, report wages in those states in Part 2 of Schedule A. The FUTA credit reduction percentage must be applied.

Credit reduction states are announced annually. Affected employers pay an increased FUTA tax rate on wages paid in those states.

Schedule A (Form 940) for 2016:

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

FUTA Taxable Wages

Reduction Rate

Credit Reduction

Postal Abbreviation

FUTA Taxable Wages

Reduction Rate

Credit Reduction

x 0

Total Credit Reduction. Add all amounts shown in the Credit Reduction boxes. Enter the total here and on Form 940, line 11

FUTA Credit Reduction Overview: A credit reduction occurs when a state fails to repay its federal unemployment insurance loan on time. The standard 5.4% credit is reduced, increasing the employer’s FUTA liability. Schedule A is used to calculate and report this.

Last reviewed: 2025-10-26: If you believe this form requires an update, please contact us.

Compliance Tips for Multi‑State Employers

Check the IRS list of credit reduction states each year before filing.

Use precise wage records by state to avoid overpaying FUTA liability.

Integrate payroll software or calculators that automatically apply credit reductions to each state’s wages.

Always retain payroll reports, EFTPS deposit confirmations, and state unemployment tax returns for cross-verification.

For easy calculations, use our Schedule A FUTA credit calculator for 2026. It applies the current year’s credit reduction rates and ensures your Form 940 is complete and compliant.

Frequently Asked Questions

Does filing status change these numbers?

Yes—brackets, deductions, credits, and phaseouts vary by status. Switch status in the full calculator.

Can I model Spanish-language IRS forms?

Sí—consulta la sección “Formas tributarias Españolas” en el hub (por ejemplo, 433A/B/F en español).

Can I claim the credit for older children?

Only qualifying children under the IRS age and dependency rules are eligible for the full credit.

Can I claim EITC without children?

Yes, provided income and age requirements are met.

Is Medicare tax the same as Social Security tax?

No. Social Security has a wage cap, while Medicare does not. Compare both using the Combined FICA Calculator.

Important Notes

All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.