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Form 940 Penalties for Late Filing and Payment
Charles Hardy | Last Updated: December 19, 2025
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What is the penalty for late filing of Form 940?
You will be subjected to IRS penalties if your Form 940 is not filed on the correct due date. This penalty may increase depending on the number of days your return is late.
- Your penalty is 5% of the unpaid taxes for each month or part of a month that a tax return is late. The penalty will increase to a maximum of 25% of your unpaid taxes.
- If your return is late for more than 60 days, click here to know the penalty rates.
What is the penalty for late payment of 940 taxes?
You may be charged with penalties if you do not make required FUTA tax deposits on time or make deposits for less than the actual amount.
The table below has the penalty rates for amounts not properly or timely deposited:
| Penalty | Charged For |
|---|---|
| 2% | 1 to 5 calendar days late |
| 5% | 6 to 15 calendar days late |
| 10% | Deposits made 16+ days late but 10 days before the date of the first IRS notice |
| 15% | Deposits still unpaid more than 10 days after the date of the first IRS notice |
Tips to Avoid 940 Penalties
The IRS penalties can be avoided if you follow the correct way to make payments to the IRS. To avoid hefty penalties from the IRS, follow the tips below:
- Deposit & pay the taxes on time when they are due.
- File Form 940 before the due date.
- Attach Form 940 Schedule R if required.
- Attach Form 940 Schedule A if required.
To ensure timely filing before the due date, the IRS recommends e-filing Form 940.
Make Timely Deposits and E-File 940 with TaxBandits to Avoid Penalties!
TaxBandits will notify you of crucial IRS deadlines via email or phone, helping you stay compliant and avoid late filing penalties. TaxBandits also simplifies your tax payments with the EFTPS payment solution. When you e-file 940 with TaxBandits, your return is checked for errors using IRS Business Rules, ensuring accurate filing.
Click here to learn how to pay your taxes and e-file Form 940 with TaxBandits.