IRS Releases Drafts of 2023 Form 940, Credit Reduction Schedule

The Internal Revenue Service released drafts versions of Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, and its Schedule A, Multi-State Employer and Credit Reduction Information, on June 6.

The drafts are not substantially changed from the current versions of the forms.

Draft Schedule A notes that California, Connecticut, Illinois, and New York might receive a credit reduction rate of 0.6% for 2023. These jurisdictions received a 0.3% credit reduction for 2022 and failed to pay their outstanding balance by Jan. 1, 2023, making them at risk of receiving another credit reduction in 2023.

Connecticut and Illinois have since ...