Federal unemployment tax important date depend on how often you pay payroll

Federal unemployment tax (FUTA) is due quarterly, but the exact important date depends on when you paid your employees during that quarter. The IRS groups FUTA into four quarters: January through March, April through June, July through September, and October through December. You owe FUTA on wages you actually paid during each quarter, not on wages you will pay later.

The payment is due the last day of the month after the quarter ends. So if you paid employees in the first quarter (January–March), your FUTA payment is due April 30. For the second quarter (April–June), it is due July 31. Third quarter (July–September) is due October 31. Fourth quarter (October–December) is due January 31 of the following year.

You report FUTA on Form 940, which you file once per year by January 31. But you may need to make deposits before then if your FUTA liability reaches a certain threshold during the year.

Key Takeaways

  • FUTA deposits are due the last day of the month following each quarter: April 30, July 31, October 31, and January 31.
  • You must deposit FUTA if your liability reaches $500 or more in any quarter; if it stays under $500, you can carry it forward to the next quarter.
  • Form 940 is filed once yearly by January 31 and reconciles all quarterly deposits against your actual FUTA liability for the year.
  • Deposits are made through the Electronic Federal Tax Payment System (EFTPS) or through your tax professional or payroll service.

When you must deposit FUTA before the quarterly important date

You do not have to deposit FUTA every quarter if your liability is small. The $500 rule determines when you must deposit: if your FUTA liability for a quarter reaches $500 or more, you must deposit it by the last day of the month after that quarter ends. If it stays under $500, you can add it to the next quarter's liability.

This means a small employer might owe FUTA for two or three quarters but only make one deposit when the total hits $500. Once you deposit, you reset the running total for the next quarter.

If you reach $500 partway through a month, you still have until the last day of that month to deposit. You do not need to deposit mid-month or weekly.

How to make a FUTA deposit

FUTA deposits must be made electronically through the Electronic Federal Tax Payment System (EFTPS), which is free and run by the U.S. Department of the Treasury. You can enroll in EFTPS online at eftps.gov. After you enroll, you can schedule deposits up to 120 days in advance.

If you use a payroll service or accountant, they often make FUTA deposits on your behalf. You should confirm with them that they are handling FUTA and ask when they deposit it — some deposit quarterly, others deposit when the $500 threshold is reached.

If you miss a deposit important date, the IRS charges a penalty based on how late the payment is. Penalties range from 2% to 15% of the unpaid amount, depending on how many days late you are. Interest also accrues on unpaid FUTA.

Form 940 and the annual FUTA reconciliation

You file Form 940 (Employer's Annual Federal Unemployment Tax Return) once per year by January 31 to report all FUTA for the previous calendar year. This form reconciles what you deposited during the year against what you actually owe based on your payroll records.

On Form 940, you report total wages paid, wages subject to FUTA (which excludes wages over $7,000 per employee per year), and your FUTA tax rate. The standard federal rate is 6%, but you may receive a credit if you paid state unemployment tax (SUTA). Most employers end up paying an effective rate of 0.6% after the SUTA credit.

If you deposited more than you owe, the IRS refunds the difference or applies it to next year's FUTA. If you deposited less, you owe the balance by the Form 940 important date.

State unemployment tax important date are separate from federal

FUTA is federal only. Each state also requires state unemployment tax (SUTA), and state important date are different from federal important date. Some states require quarterly deposits like FUTA; others require monthly deposits or have different thresholds for when deposits are due.

You must track both FUTA and SUTA separately. Missing a state important date can result in state penalties and interest, separate from any federal penalties. If you work in multiple states, each state has its own important date and rules.

Your payroll service or accountant can track both for you, but you remain responsible for ensuring deposits are made on time.

What happens if you miss a FUTA important date

If you do not deposit FUTA by the important date, the IRS assesses a failure-to-deposit penalty. The penalty is a percentage of the unpaid amount and depends on how late the deposit is: 2% if paid within 5 days late, 5% if paid 6–15 days late, 10% if paid 16 or more days late, and 15% if paid after the IRS has issued a notice of intent to levy.

Interest also accrues on the unpaid FUTA from the original due date. If the delay is significant, the IRS may also assess a failure-to-file penalty on Form 940.

If you discover you missed a important date, deposit the amount when ready and file Form 940 on time. The sooner you pay, the lower the penalty will be.

Frequently Asked Questions

Do I have to deposit FUTA every quarter?

No. You only deposit FUTA when your liability reaches $500 in a quarter. If you owe less, you carry it forward to the next quarter. Once you deposit, the running total resets.

What if I have no employees for a quarter?

If you paid no wages in a quarter, you owe no FUTA for that quarter. You still file Form 940 annually to report that you had no FUTA liability, but you do not make a deposit.

Can I pay FUTA by check or credit card?

No. FUTA must be deposited electronically through EFTPS. You cannot pay by check, credit card, or mail. If you use a payroll service, they handle the electronic deposit for you.

What is the SUTA credit and how does it affect my FUTA rate?

The SUTA credit allows you to reduce your federal FUTA rate from 6% to 0.6% if you pay state unemployment tax on time. Most employers receive this credit, which is why the effective federal rate is much lower than the stated 6% rate.

When do I file Form 940 if my business closes mid-year?

You file Form 940 by January 31 of the following year, even if your business closed. Check the box on Form 940 that indicates you are a final return, and report all wages paid through the date you closed.