Understanding the Difference between
Form 940 and Form 941

Learn the key differences between Form 940 and Form 941, including what taxes they report,
filing frequency, and employer responsibilities.

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Employers in the United States must comply with multiple federal payroll tax obligations, and two of the most important filings are Form 940 and Form 941. Understanding the differences between these forms is essential for accurate IRS reporting.

Table of Contents

  • What is Form 940?
  • What is Form 941?
  • Difference Between Form 940 and Form 941

What is Form 940?

  • Form 940, Employer's Annual Federal Unemployment Tax Return, is an IRS form used by employers to report and pay Federal Unemployment Tax Act (FUTA) taxes.
  • These taxes help fund unemployment compensation programs that provide benefits to workers who lose their jobs, not on their own.
  • Employers who meet the IRS filing requirements must file Form 940 annually to calculate their annual FUTA tax liability, report taxable wages paid to employees and claim any applicable credits for state unemployment taxes paid.

What is Form 941?

  • Form 941, Employer's Quarterly Federal Tax Return, is used by employers to report federal income tax withheld from employees wages, as well as the employers and employees shares of Social Security and Medicare taxes (FICA).
  • Most employers are required to file Form 941 every quarter to report wages paid, tips received, taxes withheld, and payroll tax liabilities. The form helps the IRS track and reconcile payroll taxes throughout the year.
  • Even if you paid no wages during a quarter, you must file a Zero Return to remain compliant with the IRS.

Difference Between Form 940 and Form 941

The key differences between 940 and 941 is explained:

FeatureForm 940Form 941
Tax reportedFederal Unemployment Tax Act (FUTA)Federal income tax withheld, Social Security tax, Medicare tax (FICA)
Filing frequencyAnnualQuarterly
Filing deadlineJanuary 31
  • Q1: April 30
  • Q2: July 31
  • Q3: October 31
  • Q4: January 31
Who pays itEmployer onlyEmployer and employee
Tax rate

FUTA Tax Rate: 6.0%

  • Social Security Tax: 12.4% (6.2% for employee & employer)
  • Medicare Tax: 2.9% (1.45% for employee & employer)
Taxable wage baseThe first $7,000 of wages paid to each employee per year is subject to FUTA tax.
  • Social Security tax applies up to the annual wage base limit of $184,500 for 2026.
  • Medicare tax applies to all wages with no wage limit.
Deposits
If your FUTA tax liability is
  • More than $500 in a quarter, deposit by the last day of the following month.
  • $500 or less in a quarter: carry it forward to the next quarter.
  • If fourth-quarter liability is $500 or less, you can pay it with your Form 940 filing before the deadline.
  • If your total tax liability during the lookback period is
    • $50,000 or less: Monthly
    • More than $50,000: Semiweekly
  • If you accumulate $100,000 or more in tax liability on any day, you must deposit it by the next business day.
  • If your total tax liability for the quarter is less than $2,500, you can pay the amount with your Form 941 filing.

E-File your Form 940 and Form 941 with TaxZerone

  • Report zero wages on Form 941- Even if you have no payroll activity for the quarter.
  • 941 Bulk upload for multiple filers - Upload multiple Form 941 returns at once using our bulk upload feature, ideal for tax professionals and businesses managing high-volume filings.
  • All schedules included at no additional cost - TaxZerone supports 941 Schedule B, Form 8974, Form 8453-EMP, and Form 940 Schedule A - all included without fees.
  • Flexible payment options - Pay securely via EFW, EFTPS, credit or debit card, or money order.
  • Expert support - Get assistance from our friendly support team via Phone (English and Spanish), Live chat or Email.

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