To file Form 940 electronically, you submit it through IRS-approved tax software that connects to the Modernized e-File (MeF) system, or you hire a tax professional or payroll service to transmit it for you. There is no free IRS portal for employment tax returns — the agency does not accept Form 940 directly on its website. For tax year 2025, the return is due February 2, 2026, with an automatic extension to February 10 if every FUTA deposit during the year was on time.
What You Need Before You Start
Your EIN
Every electronic submission requires your nine-digit Employer Identification Number. The IRS system rejects returns immediately if the EIN is missing, expired, or doesn’t match agency records. If you don’t have one, you can apply online at IRS.gov and receive it the same day.
IRS-Approved Software
You must use software specifically approved for the 94x MeF program. The IRS lists approved providers at IRS.gov/EmploymentEfile, organized by tax year. Expect to pay a fee.1Internal Revenue Service. E-File Employment Tax Forms If handling the software yourself isn’t practical, a tax professional or payroll service can file on your behalf.
An Electronic Signature
Every e-filed Form 940 has to be signed electronically. The IRS accepts four signature methods:2Internal Revenue Service. Modernized e-File (MeF) for Employment Taxes Frequently Asked Questions
- Online signature PIN. You apply through your software for a 10-digit PIN that the IRS mails to you. Allow at least 45 days for delivery, so apply well before the deadline.3Internal Revenue Service. Using a Form 94x Online Signature PIN to E-File Employment Tax Forms
- Practitioner PIN. You and your tax professional complete Form 8879-EMP to create a 5-digit PIN that authorizes the professional to sign for you.
- Reporting agent PIN. A payroll service or accounting firm authorized through Form 8655 signs all returns they file for you.4Internal Revenue Service. Form 8655, Reporting Agent Authorization
- Form 8453-EMP. You physically sign the declaration, scan it as a PDF, and your software transmitter attaches it to the electronic return. No PIN required.
If you’re filing yourself for the first time and didn’t request the 10-digit PIN weeks ago, Form 8453-EMP is the fastest backup.
Get the FUTA Numbers Right Before You Enter Them
The numbers you type into the software come from your payroll records, and getting them right matters more than any other step. The IRS cross-references your Form 940 data against the quarterly state unemployment reports you’ve already filed.
Start with total compensation paid to all employees during the calendar year, including wages, salaries, and bonuses. Subtract any payments exempt from FUTA under the Form 940 instructions. Then apply the $7,000 per-employee wage cap: anything above $7,000 paid to any one worker is ignored for FUTA.5Office of the Law Revision Counsel. 26 USC 3306 – Federal Unemployment Tax Act
The gross FUTA rate is 6.0%, but employers who paid state unemployment tax (SUTA) on time receive a credit of up to 5.4%, dropping the effective rate to 0.6% — a maximum of $42 per employee per year.6U.S. Department of Labor. Unemployment Insurance Tax Topic Your software calculates this once you enter your state unemployment contributions.
Credit reductions apply in states whose unemployment trust funds have unpaid federal loans. For tax year 2025, California faces a 1.2% credit reduction and the U.S. Virgin Islands faces a 4.5% reduction, which raises the effective FUTA rate for employers in those jurisdictions.7Federal Register. Notice of the Federal Unemployment Tax Act (FUTA) Credit Reductions Applicable for 2025 The software prompts you for the states you paid SUTA to and handles the math from there.
One boundary worth flagging: household employers who paid $1,000 or more in cash wages in any quarter don’t use Form 940 at all. They report FUTA on Schedule H attached to their personal Form 1040.8Internal Revenue Service. Instructions for Schedule H
Transmitting the Return and Confirming Acceptance
Once your software validates the data by checking for missing fields, math errors, and formatting problems, you apply your electronic signature and transmit. The return travels over a secure connection to the IRS MeF servers. The software handles the encryption; you click submit.
Right after transmission, the IRS sends an initial acknowledgment confirming the data package arrived. That is not acceptance. Within 24 to 48 hours, a second notice arrives marking the return “Accepted” or “Rejected.” Accepted means you’re done. Rejected notices include an error code identifying the specific problem — a bad EIN, a math error, a schema violation. Fix it in the software and retransmit as soon as possible.
Save the acceptance confirmation. The IRS requires you to keep all employment tax records, including filed returns and confirmation numbers, for at least four years after filing the fourth-quarter return for that year.9Internal Revenue Service. Employment Tax Recordkeeping Your official filing date is the date the IRS accepted the transmission, not the date you hit send.
Paying a Balance Due
Form 940 is an annual reconciliation. FUTA tax itself is deposited quarterly through the Electronic Federal Tax Payment System (EFTPS) whenever your cumulative liability exceeds $500 in a quarter.10Internal Revenue Service. Depositing and Reporting Employment Taxes If total FUTA for the year is $500 or less, you can skip quarterly deposits and pay the full amount with the return.11Internal Revenue Service. Topic No. 759, Form 940 – Filing and Deposit Requirements
When your annual return shows a balance due, you pay it separately from the return. Two options:
- EFTPS. Schedule the payment at EFTPS.gov. Payments must be submitted at least one business day before the due date, by 8:00 PM Eastern, to arrive on time.
- Electronic Funds Withdrawal. Some e-filing software lets you authorize the IRS to debit your bank account on a date you choose, all during the filing process.
If the reconciliation shows you overpaid, you can either request a refund or apply the overpayment as a credit against next year’s FUTA. Applying the credit is simpler and reduces your future deposit obligations.
Filing Deadline for Tax Year 2025
The standard Form 940 deadline is January 31 following the tax year. Because January 31, 2026, falls on a Saturday, the 2025 return is due February 2, 2026.12Internal Revenue Service. Instructions for Form 940 – Employers Annual Federal Unemployment (FUTA) Tax Return
There’s a built-in extension. If you deposited all FUTA tax on time during the year, you have until February 10, 2026, to file.13Internal Revenue Service. Instructions for Form 940 No paperwork required. Miss even one deposit deadline during the year, and the deadline reverts to February 2.
Correcting a Return You Already Filed
If you discover an error after acceptance — a miscalculated credit, wages reported to the wrong state, a missed employee — you file an amended Form 940 through the same MeF system.1Internal Revenue Service. E-File Employment Tax Forms In your software, check the “Amended Return” box, correct the lines, and retransmit. The acceptance process works the same way. File the amendment as soon as you spot the error; waiting increases the chance of penalty and interest if additional tax is owed.
Penalties for Filing or Paying Late
Two separate penalty provisions apply to Form 940, and they can stack.
The failure-to-file penalty under IRC Section 6651 is 5% of the unpaid tax for each month or partial month the return is late, capped at 25%.14Office of the Law Revision Counsel. 26 USC 6651 – Failure to File Tax Return or to Pay Tax It applies to the amount owed that wasn’t paid by the due date, so timely quarterly deposits reduce exposure even when the return itself is late.
The failure-to-deposit penalty under IRC Section 6656 is tiered by how late the deposit is:15Office of the Law Revision Counsel. 26 USC 6656 – Failure to Make Deposit of Taxes
- 1 to 5 days late: 2% of the underpayment
- 6 to 15 days late: 5%
- More than 15 days late: 10%
- Still unpaid 10 days after a delinquency notice: 15%
First-time penalty abatement can wipe the slate if you have a clean compliance record. You qualify if you filed the same type of return for the prior three years, had no penalties during that period (or had them removed for a reason other than first-time abatement), and the penalty wasn’t triggered by EFTPS avoidance.16Internal Revenue Service. Administrative Penalty Relief You can request abatement before fully paying the underlying tax, though interest continues to accrue on any unpaid balance.