Form 940 is the annual FUTA return that pulls together all four quarters of your federal unemployment tax. For 2025 wages reported in 2026, the return is generally due on February 2, 2026, with a February 10, 2026, grace date only if every FUTA deposit was made in full and on time. This guide walks through how those deadlines tie into the quarterly deposit schedule, how the $500 rule works in practice, and what employers should review before filing to keep FUTA reporting accurate and penalty-free.<\/p>\n
Form 940 reports an employer\u2019s Federal Unemployment Tax Act liability for the prior calendar year. FUTA applies at 6% on the first $7,000 of each employee\u2019s wages, and timely state unemployment tax payments usually reduce this to an effective 0.6%.<\/p>\n
An employer must file Form 940 if:<\/strong><\/p>\n Even when the SUTA credit reduces FUTA liability to zero, Form 940 must still be filed to report annual unemployment tax information.<\/p>\n Deadlines matter because:<\/strong><\/p>\n The filing deadline for the 2025 Form 940 is February 2, 2026. January 31 is normally the due date, but it falls on a weekend, so it is forwarded to the next business day.<\/p>\n The IRS provides a 10-day grace period only when all required FUTA deposits are made on time. Since no deposits are required when annual FUTA liability is $500 or less, employers in this situation can follow the<\/p>\n regular filing deadline unless the IRS issues some other specific guidance. If even a single payment was late or short, the return must be filed by February 2, and the grace period will not be applicable anymore.<\/p>\n Both paper and e-file use the same deadline. E-filing is strongly recommended, mostly because it saves employers a lot of time. If a business closes or is sold, then you still have to submit a final Form 940 after the last wages are issued and check the box for a final return.<\/p>\n FUTA doesn’t run on a predictable monthly deposit schedule. The IRS applies the $500 rule, which requires employers to monitor cumulative FUTA liability throughout the year to determine when deposits are due.<\/p>\n Here is the FUTA deposit schedule for 2025 liability reported in 2026:<\/p>\n How the $500 rule works:<\/strong><\/p>\n As an employer, you need to review your cumulative FUTA liability at the end of each quarter to determine whether a deposit is required under the $500 rule. If your cumulative FUTA tax for the quarter (including any amount carried forward) is more than $500, the deposit is due by the end of the month following the quarter end. If it is $500 or less, the amount carries forward to the next quarter.<\/p>\n FUTA deposits must be made electronically through an IRS-approved method such as EFTPS. If you miss the EFTPS cutoff time, you can still make a same-day wire transfer through the Federal Tax Collection Service to keep the payment on time. The $100,000 next-day deposit rule that applies to federal income tax and FICA deposits does not apply to FUTA; FUTA deposits follow only the $500 threshold and the quarterly schedule.<\/p>\n If an employer forgets a deadline, here is what the penalty structure looks like:<\/p>\n Interest begins the day after a payment is due and compounds daily.<\/p>\n The FUTA credit also suffers when state unemployment taxes are paid late. Missing those deadlines reduces the 5.4% credit and increases the amount due on Form 940.<\/p>\n Some businesses fall into situations the IRS considers special:<\/p>\n Seasonal payers<\/strong><\/p>\n Businesses like holiday shops or ski resorts often only pay wages for a few months of the year. Even so, FUTA still follows the $500 rule, and Form 940 is due February 2, 2026 (or February 10, 2026, if you deposited all FUTA tax when due).<\/p>\n New businesses<\/strong><\/p>\n For new employers, FUTA deposits only begin when the cumulative liability crosses $500. Until that point, there are no deposits. Once the threshold is met, the first deposit is due by the last day of the month after the quarter.<\/p>\n Credit reduction states<\/strong><\/p>\n Each November, the Department of Labor identifies states that owe federal unemployment loans. Employers in those states pay extra FUTA, but all deadlines remain exactly the same.<\/p>\n Mergers, acquisitions, and closures<\/strong><\/p>\n When ownership changes, each responsible employer files their own Form 940 for the period that they had liability. Successor rules may require the new employer to count wages paid by the old employer toward the $7,000 FUTA wage base. If a business closes, the final Form 940 is still required.<\/p>\n A simple checklist keeps FUTA from spiraling into penalty territory.<\/p>\n No. The only relief is the February 10 grace period for perfect deposit history.<\/p>\n If your FUTA tax for a quarter is $500 or less, you need to carry it forward to the next quarter deposit only when the cumulative amount for a quarter exceeds $500. If the fourth-quarter total is $500 or less, pay it with Form 940 by February 2, 2026.<\/p>\n No. Both paper filing and e-filing methods follow the same dates.<\/p>\n It moves to the next business day.<\/p>\n No. FUTA must be paid separately.<\/p>\n It reduces the credit and increases FUTA tax owed, which raises the Form 940 balance.<\/p>\n Form 940 is a straightforward annual filing, but missing its deadlines can still lead to penalties and added compliance work. Keeping in mind the date of the 2026 filing, the $500 FUTA rule, the quarterly deposit dates, and how credit reductions work will help you maintain organized and hassle-free deposit and e-filing of the form.<\/p>\n Don\u2019t leave FUTA compliance to chance. Use Tax1099 to monitor liability, schedule deposits, and e-file Form 940 before the deadline.<\/p>\n\n
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Form 940 Deadline For 2026 And How The Grace Period Works<\/h2>\n
FUTA Deposit Calendar For 2026 And The $500 Accumulation Rule<\/h2>\n
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\n \nQuarter-End<\/th>\n Deposit Due<\/th>\n Notes<\/th>\n<\/tr>\n<\/thead>\n \n March 31<\/td>\n April 30<\/td>\n Deposits must be made electronically<\/td>\n<\/tr>\n \n June 30<\/td>\n July 31<\/td>\n Standard deadline<\/td>\n<\/tr>\n \n September 30<\/td>\n October 31<\/td>\n Standard deadline<\/td>\n<\/tr>\n \n December 31<\/td>\n February 2, 2026<\/td>\n If the balance of undeposited FUTA at the end of Q4 is $500 or less, you may pay it with your Form 940 instead of depositing.
\nHowever, once cumulative liability exceeds $500 during the year, a deposit is required.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n
Form 940 Penalties And Interest For 2026<\/h2>\n
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\n \nSituation<\/th>\n Penalty Rate<\/th>\n Trigger<\/th>\n<\/tr>\n<\/thead>\n \n Late Form 940 filing<\/td>\n 5% per month up to 25%<\/td>\n Based on the unpaid FUTA<\/td>\n<\/tr>\n \n Deposit 1 to 5 days late<\/td>\n 2%<\/td>\n Amount not deposited<\/td>\n<\/tr>\n \n Deposit 6 to 15 days late<\/td>\n 5%<\/td>\n Same<\/td>\n<\/tr>\n \n Deposit 16 or more days late<\/td>\n 10%<\/td>\n Same<\/td>\n<\/tr>\n \n Not deposited within 10 days after the first IRS notice<\/td>\n 15%<\/td>\n Highest penalty level<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Special Situations That Affect Form 940 Filing<\/h2>\n
A Year-Round Checklist For Staying Compliant<\/h2>\n
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Scenarios That Show How FUTA Rules Work In Real Life<\/h2>\n
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\n \nScenario<\/th>\n Correct Action<\/th>\n Deadline<\/th>\n<\/tr>\n<\/thead>\n \n FUTA liability reaches $650 in Q2<\/td>\n Deposit the full $650 electronically<\/td>\n July 31<\/td>\n<\/tr>\n \n FUTA totals $420 for the year<\/td>\n Pay with Form 940 instead of depositing<\/td>\n February 2<\/td>\n<\/tr>\n \n All deposits were on time<\/td>\n File using the grace period<\/td>\n February 10<\/td>\n<\/tr>\n \n Q3 deposit paid 20 days late<\/td>\n 10% late deposit penalty applies<\/td>\n <\/td>\n<\/tr>\n \n A seasonal business only pays wages in winter<\/td>\n Deposit only when cumulative FUTA exceeds $500 for a quarter still file Form 940 by the deadline<\/td>\n February 2<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n FAQs<\/h2>\n
1. Is there an extension for Form 940?<\/h5>\n
2. What if FUTA liability hits exactly $500?<\/h5>\n
3. Does e-filing change the Form 940 deadline?<\/h5>\n
4. What if a deadline falls on a legal holiday?<\/h5>\n
5. Can a payer combine FUTA payments with payroll withholding in a single EFTPS deposit?<\/h5>\n
6. How does late SUTA payment affect FUTA?<\/h5>\n
Final Thoughts<\/h2>\n