What is Part 1 in Form 940 represent?

The part 1 in Form 940 requires you to specify whether:

• You are a single-state employer (you paid state unemployment tax in only one state) (Line 1a)
• You are a multi-state employer (i.e., you paid state unemployment tax in more than one state) (Line 1b)
• You paid employees' wages in a credit reduction state (Line 2)

Also, you must complete and submit Schedule A of Form 940 if you are a multi-state business or received wages in a credit-reduction state.