Form 940 is due January 31 of the year after the tax year ends

Your Form 940 payment — the federal unemployment tax you owe on wages you paid employees — is due on January 31 of the following year. If you paid $500 or less in unemployment tax for the year, you may be able to deposit it with your annual return instead of making quarterly deposits. If you paid more than $500, you must make deposits throughout the year on a schedule set by the IRS, and the final deposit is due by January 31.

The January 31 deadline applies whether you file on paper or electronically. If January 31 falls on a weekend or federal holiday, the deadline moves to the next business day. The IRS counts a payment as on time if it arrives at an approved bank or financial institution by that date, or if you submit it electronically through the IRS system by midnight Eastern Time.

You must file Form 940 even if you owe no tax — for example, if you had no employees or if all your employees worked in states that don't require federal unemployment tax contributions. Filing a zero-tax return keeps you in compliance and protects you if the IRS later questions your payroll records.

Key Takeaways

  • Form 940 and its payment are both due January 31 of the year following the tax year, with no extensions available for the payment itself.
  • If you owed more than $500 in unemployment tax during the year, you must have made quarterly deposits throughout the year, not a single January payment.
  • The IRS accepts Form 940 electronically through approved tax software or through EFTPS (Electronic Federal Tax Payment System), which is the safest way to meet the deadline.
  • Penalties for late payment start at 2 percent of the unpaid tax and increase the longer the payment remains overdue.
  • You must file Form 940 even if you owe zero tax, because failure to file carries its own penalty separate from the payment penalty.

Quarterly deposits if you owed more than $500

If your total unemployment tax liability for the year exceeded $500, you cannot wait until January 31. Instead, you must deposit tax four times during the year on a quarterly schedule. Each quarter's deposit is due on the last day of the month following the end of that quarter: April 30 for Q1, July 31 for Q2, October 31 for Q3, and January 31 for Q4.

The IRS determines whether you owe more than $500 based on your actual payroll and tax rate. If you are unsure whether you crossed that threshold, calculate your total unemployment tax for the year and compare it to $500. If you are close, deposit quarterly to be safe — depositing early costs nothing, and underpayment penalties are steep.

You make these deposits through EFTPS (the Electronic Federal Tax Payment System) or through an approved financial institution. You do not send cash or checks to the IRS for these deposits. EFTPS is free and allows you to schedule payments up to 120 days in advance, which is the safest way to ensure you never miss a deadline.

How to file Form 940 itself by January 31

Filing the form and paying the tax are two separate actions. You must file Form 940 by January 31 even if you have already paid all your quarterly deposits. The form itself reports your total payroll, your tax calculation, and confirms that you made the required deposits on time.

You can file Form 940 on paper by mailing it to the IRS address listed in the form instructions, or you can file electronically through tax software or a tax professional. Electronic filing is faster and produces a confirmation number immediately, so you have proof the IRS received it. Paper filing takes 4 to 6 weeks for the IRS to process and acknowledge.

If you use a payroll service or accountant, they often file Form 940 on your behalf as part of their year-end service. Confirm with them in December that they will handle it, and ask them to send you a copy once it is filed. You remain responsible for the deadline even if someone else prepares the form.

What happens if you miss the January 31 deadline

The IRS charges a failure-to-pay penalty of 0.5 percent of the unpaid tax for each month the payment is late, up to 25 percent total. If you also fail to file the form itself, there is a separate failure-to-file penalty of 5 percent per month, up to 25 percent. If both apply, the total can reach 50 percent of the unpaid tax.

Penalties begin accruing the day after the deadline. A payment that arrives on February 1 is already one day late. The IRS does not waive these penalties automatically, though you can request relief if you have a documented reason — for example, a death in your family, a serious illness, or a fire that destroyed your records. The request must be made in writing within a reasonable time after you discover the missed deadline.

If you cannot pay the full amount by January 31, file the form on time anyway and pay as much as you can. The failure-to-file penalty is much larger than the failure-to-pay penalty, so filing on time and paying late is far better than missing both deadlines. You can then set up a payment plan with the IRS for the remaining balance.

EFTPS and other safe payment methods

EFTPS is the IRS's official electronic payment system and is free to use. You enroll once, then schedule payments online or by phone. EFTPS allows you to schedule payments up to 120 days in advance, so you can set up your January 31 payment in November and know it will go through on time. The system sends you a confirmation number immediately after you schedule a payment.

You can also pay through a bank or credit union that offers bill pay, or through approved tax software that integrates with the IRS payment system. Credit card payments are possible through third-party processors, but they charge a fee (usually 2 to 3 percent of the payment amount) that the IRS does not charge. For a $5,000 payment, a credit card fee could be $100 to $150, so EFTPS or bank transfer is almost always cheaper.

Do not mail a check unless you have no other option. Mailed checks take 7 to 10 days to arrive and clear, and if it arrives after January 31, you are late even if you mailed it on time. If you must mail a check, send it at least two weeks early and use certified mail so you have proof of the mailing date.

Form 940 extension and what it does and does not cover

The IRS allows a six-month extension to file Form 940 — moving the deadline from January 31 to July 31. However, the extension does not extend the payment deadline. Your tax payment is still due January 31, and penalties begin accruing February 1 if it is not paid by then.

To request an extension, file Form 7004 (Application for Automatic Extension of Time To File Certain Business Income Tax Returns) by January 31. You do not need a reason to receive the extension — it is automatic if you file the form on time. However, you must still pay your tax by January 31 to avoid penalties, even though you have until July 31 to file the form itself.

An extension is useful if you are waiting for final payroll records from a third party, or if you need time to reconcile your records with your accountant. It is not useful for delaying payment. If you cannot pay by January 31, contact the IRS about a payment plan instead of relying on an extension.

State unemployment tax deadlines and Form 940

Form 940 is federal only, but most states also require you to file a state unemployment tax return and make a state payment. State deadlines vary: some states align with the federal January 31 deadline, while others use different dates. You must meet both deadlines to stay in compliance.

State unemployment tax rates and payment schedules also vary by state. Some states require quarterly deposits like the federal system; others allow annual payments. Check with your state's labor or revenue department for the specific deadline and deposit schedule in your state. Your payroll service or accountant can tell you which states apply to your business and when each payment is due.

Failing to pay state unemployment tax carries state-level penalties separate from federal penalties. In some states, unpaid unemployment tax can result in liens on your business assets or personal liability for the owner. Treating state deadlines as seriously as the federal deadline protects you from compounding penalties.

Frequently Asked Questions

Can I get an extension on the payment deadline itself?

No. The IRS allows a six-month extension to file the form, but not to pay the tax. Your payment is due January 31 regardless. If you cannot pay in full, contact the IRS about setting up a payment plan before the deadline to minimize penalties.

What if I had no employees during the year?

You must still file Form 940 showing zero tax. Failure to file carries a penalty even if you owe nothing. Filing a zero-tax return takes 15 minutes and protects you if the IRS later questions your payroll records.

Is EFTPS really free, or are there hidden fees?

EFTPS is completely free. The IRS operates it at no cost to you. If someone charges you to use EFTPS, they are a scammer. Go directly to eftps.gov or call 1-800-555-4477 to enroll.

What if my accountant files Form 940 late without telling me?

You are still responsible for the penalty. The IRS holds the business owner liable, not the preparer. Ask your accountant in writing by December 15 to confirm they will file by January 31, and request a copy of the filed form as proof.

Do I need to file Form 940 if I use a payroll service?

Your responsibility to file does not change, but your payroll service may file it for you as part of their service. Confirm this in writing before year-end. Even if they handle it, you should receive a copy and review it to catch errors before the deadline.