Employers who provide unemployment benefits to employees who have lost their jobs must file IRS Form 940 annually. This article outlines the key deadlines and necessary steps for compliance.

Table of Contents:

Employer’s Annual Federal Unemployment Tax

Form 940 is used to report the Employer’s Annual Federal Unemployment (FUTA) Tax. Only employers are responsible for paying FUTA tax—not employees.

The FUTA tax applies to the first $7,000 paid to each employee in a calendar year. Employers must file Form 940 if they:

• Paid wages of $1,500 or more in any calendar quarter.
• Had one or more employees for at least part of a day in 20 or more different weeks.

Employers must pay a 6% tax on each employee’s first $7,000 in wages. However, if state unemployment taxes (SUTA) are paid on time, the FUTA tax rate may be reduced to 0.6%.

Deadline to File IRS Form 940

The deadline for filing Form 940 is based on when the FUTA taxes are deposited. If the FUTA tax liability exceeds $500 for the calendar year, payments must be deposited at least once per quarter. If the liability is $500 or less, it can be carried forward to the following quarter.

Quarterly Deposit Due Dates

• March 31: Deposit by April 30
• June 30: Deposit by July 31
• September 30: Deposit by October 31
• December 31: Deposit by January 31

The due date for filing Form 940 for the 2023 tax year is January 31, 2024. If all FUTA taxes are deposited on time, the deadline extends to February 10, 2024.

Penalties for Late Filing

Penalties apply for late deposits or incorrect payments. These penalties increase based on the number of days late:

• 1 to 5 days late: 2% penalty
• 6 to 15 days late: 5% penalty
• 16+ days late: 10% penalty
• 10+ days after IRS notice: 15% penalty

To avoid penalties:

• Pay your deposits on time.
• Complete Form 940 correctly.
• Attach Schedule R (Form 940) if required.

How to File IRS Form 940 for the 2023 Tax Year

You can file Form 940 either by paper or electronically. The IRS recommends e-filing for faster processing.

Steps to File

1. Gather necessary information: business details, state information, FUTA tax calculations, and balance due.
2. Choose a filing method: paper or electronic.
3. Complete and submit the form.

E-file Your Form 940 with TaxZerone in 3 Simple Steps

TaxZerone, an IRS-authorized e-file provider, simplifies the filing process with these steps:

1. Enter the Form 940 details.
2. Pay the balance due and sign Form 940.
3. Transmit the return to the IRS.

Benefits of E-filing:

• Quick processing
• Immediate confirmation
• Secure and accurate

Also Read: How to E-File Quarterly Form 941 for Your Business in 2025?