When Are 940s Due? Employer Filing and Deposit Dates
Understand critical federal employer tax deadlines and deposit schedules to ensure compliance and avoid penalties. Master your annual obligations.
Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, serves as the vehicle for reporting these taxes to the Internal Revenue Service (IRS). Navigating the various due dates for both filing the form and depositing the associated taxes ensures businesses meet their federal responsibilities and avoid potential financial repercussions.
Understanding Form 940
This tax funds unemployment compensation for workers who lose their jobs, and it is paid solely by employers, not deducted from employee wages. The FUTA tax applies to the first $7,000 of wages paid to each employee during a calendar year. The federal FUTA tax rate is 6.0% on these taxable wages, though employers can often claim a credit of up to 5.4% for timely payments to state unemployment funds. This credit typically reduces the effective federal FUTA tax rate to 0.6% for most compliant employers.
Employers generally must file Form 940 if they paid wages of $1,500 or more to employees in any calendar quarter during the current or preceding calendar year. Additionally, if an employer had one or more employees for some portion of a day in any 20 or more different weeks during the current or preceding calendar year, they are also required to file. The form is designed to capture the total FUTA wages paid, the gross FUTA tax, and any FUTA tax adjustments or credits.
Annual Filing Deadline
The annual filing deadline for Form 940 is January 31 of the year following the calendar year the wages were paid. For example, the Form 940 for wages paid in 2024 would generally be due by January 31, 2025. This deadline applies to all employers, regardless of whether they had to make quarterly FUTA tax deposits throughout the year. The form consolidates all FUTA tax liabilities and payments for the entire preceding calendar year.
An important exception extends this deadline for employers who have made all their required FUTA tax deposits on time. If all FUTA taxes were deposited when due, employers have an additional 10 days to file, extending the deadline to February 10. Employers must ensure the form is either postmarked by the due date or electronically filed by the deadline.
Federal Unemployment Tax Deposit Requirements
While Form 940 is an annual return, FUTA tax liabilities may require quarterly deposits throughout the year, depending on the amount owed. Employers determine their FUTA tax liability at the end of each calendar quarter. If the FUTA tax liability for a quarter exceeds $500, a deposit is due by the last day of the first month following the end of that quarter.
The specific quarterly deposit due dates are April 30 for the first quarter (January 1 – March 31), July 31 for the second quarter (April 1 – June 30), and October 31 for the third quarter (July 1 – September 30). For the fourth quarter (October 1 – December 31), the deposit is due by January 31 of the following year. If the FUTA tax liability is $500 or less at the end of a quarter, it is not necessary to make a deposit for that specific quarter; instead, the amount is carried over and added to the liability for the next quarter.
If the cumulative FUTA tax liability exceeds $500 in any subsequent quarter, a deposit covering the total accumulated liability must be made by the next quarterly due date. If the total FUTA tax liability for the entire year is $500 or less, no quarterly deposits are required, and the full amount can be paid when Form 940 is filed by January 31 of the following year. Employers must use the Electronic Federal Tax Payment System (EFTPS) to make all federal tax deposits.
Consequences for Non-Compliance
Failing to meet Form 940 filing and FUTA tax deposit deadlines can result in various penalties from the IRS. These penalties are calculated based on a percentage of the underpaid or unpaid tax, and they accrue for each month or part of a month that the delinquency continues.
The penalty for failure to file Form 940 on time is typically 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25%. A separate penalty for failure to pay taxes is 0.5% of the unpaid taxes for each month or part of a month, also capped at 25%.
Failure to deposit FUTA taxes when due incurs a penalty ranging from 2% to 15% of the underpayment, depending on the length of the delay. For instance, a deposit made 1 to 5 days late may incur a 2% penalty, while a delay of more than 16 days or failure to deposit after an IRS notice can result in a 10% penalty. Additionally, interest charges may apply to any unpaid taxes and penalties, further increasing the total amount owed.