Schedule R (Form 940), Allocation Schedule for Aggregate Form 940 Filers, is the Internal Revenue Service (IRS) schedule that splits the totals on an aggregate Form 940 among the filer's clients. It is completed by agents of home care service recipients approved under section 3504 and by certified professional employer organizations (CPEOs). On FillingPDF you can fill out Schedule R (Form 940) online and download or print the completed PDF; the IRS publishes the original form and its instructions at irs.gov/Form940, and the schedule is attached to the aggregate Form 940.
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What is Schedule R (Form 940)?
Schedule R (Form 940), Allocation Schedule for Aggregate Form 940 Filers, is the IRS schedule that aggregate Form 940 filers attach to allocate the aggregate FUTA information on Form 940 to each client, with totals that must match the return.
The schedule lists one client per line. For each client EIN it reports the state, the type of wages, the total taxable FUTA wages, adjustments to FUTA tax, the credit reduction amount, the total FUTA tax after adjustments, and the total FUTA tax deposits. Each column heading names the Form 940 line it comes from: line 7, line 9 or 10, line 11, line 12 and line 13.
For this schedule, a "client" is a home care service recipient identified on Form 2678, Employer/Payer Appointment of Agent; a customer under a contract that meets section 7705(e)(2); or a client under a service agreement described in Regulations section 31.3504-2(b)(2) with a CPEO. The term includes "customer."
The first page holds 15 client lines plus lines 16 to 19 for subtotals, continuation-sheet subtotals, your own employees and the grand totals. A Continuation Sheet for Schedule R (Form 940) with 22 client lines is used when you have more than 15 clients. The form carries OMB No. 1545-0029 and the revision date Rev. December 2024.
Who needs to file Schedule R (Form 940)?
You must complete Schedule R (Form 940) if you file an aggregate Form 940. The IRS instructions identify two groups that file aggregate Forms 940:
- Section 3504 agents: agents of home care service recipients approved by the IRS under section 3504. To act as one you must file Form 2678 with the IRS, unless you are a state or local government agency acting as agent under the special procedures in Rev. Proc. 2013-39. Form 2678 must have been filed and approved before you file Schedule R.
- Certified professional employer organizations (CPEOs): to become a CPEO you apply through the IRS Online Registration System; see www.irs.gov/CPEO.
On the form you check one Type of filer box to say which of the two you are. Column c, the type of wages code, is for CPEO use only.
The schedule is tied to the aggregate Form 940: it is attached to that return and its totals must agree with it. The instructions describe no use for it outside an aggregate filing.
When to file Schedule R (Form 940)
File Schedule R (Form 940) every year when your aggregate Form 940 is due, because it is attached to that return and has no separate due date. Enter the calendar year at the top so it matches the year on the attached Form 940.
If you have more than 15 clients, prepare as many Continuation Sheets as you need before you file, and attach them with the schedule. Before you submit, compare the column totals on line 19 with the aggregate Form 940. The instructions say that if the totals do not match, there is an error that must be corrected before you submit Form 940 and Schedule R.
Form 2678 must already be filed and approved by the IRS before you file Schedule R as a section 3504 agent.
Documents you need
- The aggregate Form 940 to which Schedule R (Form 940) is attached; the EIN, name and calendar year on the schedule must match it.
- Continuation Sheet for Schedule R (Form 940), only if you have more than 15 clients; complete as many sheets as necessary and carry their line 23 subtotals to Schedule R, line 17.
- Form 2678, Employer/Payer Appointment of Agent, approved by the IRS before you file, if you are an agent of home care service recipients under section 3504 (state and local government agencies under Rev. Proc. 2013-39 excepted).
How to fill out Schedule R (Form 940)
Enter the calendar year
At the top, enter the calendar year for which you file Form 940. It must match the year on the attached Form 940.
Enter your EIN and business name
Enter your employer identification number (EIN) and the name as shown on Form 940. Both must exactly match the aggregate Form 940.
Check the type of filer
Check one box under Type of filer: Section 3504 Agent or Certified Professional Employer Organization (CPEO).
Enter each client's EIN and state
Use one line per client. In column (a) enter the client's EIN, and in column (b) the state abbreviation of the client's location.
Enter the wage type code (CPEO only)
If you are a CPEO, enter A, B, C or D in column (c) for the type of wages, tips and other compensation. Use a separate line for each type paid to the same client.
Enter wages and FUTA tax amounts
Allocate to each client EIN: column (d) from Form 940, line 7; column (e) from line 9 or 10; column (f) from line 11; column (g) from line 12. Do not use commas in amounts over 999.99.
Enter total FUTA tax deposits
In column (h), enter the client's share of the Form 940, line 13 deposits plus any other payment made with the return.
Total the client lines on line 16
Add all amounts on lines 1 through 15 in each column and enter the subtotals on line 16.
Add Continuation Sheet subtotals
If you have more than 15 clients, complete Continuation Sheets (lines 1 to 22, subtotal on line 23) and enter the combined line 23 subtotal of all sheets on line 17.
Report your own employees on line 18
Enter the Form 940 amounts for your employees on line 18, reporting the same information as for clients.
Compute the totals on line 19
Add lines 16, 17 and 18 in each column. Each total must match the related line on the aggregate Form 940.
Review and download the completed PDF
Check the year, EIN, name and column totals against Form 940. Then download or print the completed PDF from FillingPDF and attach it to the aggregate Form 940.
How to submit Schedule R (Form 940)
Schedule R (Form 940) is attached to your aggregate Form 940 and goes out with it, electronically or on paper depending on your filer type.
- Agents (section 3504): may file Form 940 and Schedule R electronically or by paper submission.
- CPEOs: must generally file Form 940 and Schedule R electronically. The IRS instructions refer to Rev. Proc. 2023-18, 2023-13 I.R.B. 605, at www.irs.gov/irb/2023-13_IRB#REV-PROC-2023-18, for the electronic filing requirement.
Attach Schedule R, including any Continuation Sheets, to the aggregate Form 940. The schedule prints no mailing address or portal of its own; for the latest information go to www.irs.gov/Form940. The instructions mention no fee for the schedule. FillingPDF lets you fill out and download the PDF; submission follows the IRS channels above.
Common mistakes to avoid
- Submitting Schedule R when the column totals on line 19 do not match the aggregate Form 940; the instructions say the error must be corrected before you submit.
- Entering an EIN, business name or calendar year at the top that does not exactly match the attached Form 940.
- Typing commas in amounts over 999.99; the instructions say not to use commas on Schedule R.
- Entering a column c code other than A, B, C or D, or filling in column c as an agent; the column is for CPEO use only.
- Reporting two types of wages for one client on a single line; use a separate line, with its own code, for each type paid.
- Leaving out your own employees on line 18, which must be reported in the same way as clients.
- Running out of client lines and not attaching Continuation Sheets, or forgetting to carry their line 23 subtotals to line 17.
- Leaving the Type of filer box unchecked instead of marking Section 3504 Agent or Certified Professional Employer Organization (CPEO).
- Filing as a section 3504 agent before the IRS has approved Form 2678.
Frequently asked questions
What is Schedule R (Form 940)?
Schedule R (Form 940) is the IRS schedule that allocates the aggregate information reported on Form 940 to each client. Section 3504 agents and CPEOs complete it and attach it to their aggregate Form 940, with column totals that must match the return.
Who has to file Schedule R with Form 940?
Anyone who files an aggregate Form 940 must complete it. The IRS instructions name agents of home care service recipients approved under section 3504 and certified professional employer organizations (CPEOs) as the aggregate filers.
What do the column c codes A, B, C and D mean?
Column c is for CPEO use only. A is wages paid under section 3511(a); B is wages paid under section 3511(c); C is other wages paid as a payor under a service agreement in Regulations section 31.3504-2(b)(2); D is wages paid as an agent under Regulations section 31.3504-1.
What if I have more than 15 clients?
Complete as many Continuation Sheets for Schedule R (Form 940) as you need. Each sheet has 22 client lines and a line 23 subtotal. Add the line 23 subtotals of all sheets and enter the combined amount on Schedule R, line 17.
Do the totals on Schedule R have to match Form 940?
Yes. The column totals on line 19, which include your own employees from line 18, must match the related lines on the aggregate Form 940. If they do not, the instructions say to correct the error before submitting both.
Can I e-file Schedule R (Form 940)?
Agents may file Form 940 and Schedule R electronically or on paper. CPEOs must generally file both electronically; the instructions refer to Rev. Proc. 2023-18 for that requirement.
Can I fill out Schedule R (Form 940) online on FillingPDF?
Yes. You can fill out the PDF online on FillingPDF and download or print it. FillingPDF is an independent service and does not file the schedule with the IRS; you submit it with your aggregate Form 940 through the IRS channels.
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