Employer's Annual Federal Unemployment Tax Return in Aurora, Illinois (2026)
Your payroll operations will be halted, and you could face significant IRS penalties and back-tax assessments without a timely filed Employer's Annual Federal Unemployment Tax Return (FUTA). This federal return is managed through the IRS and is a mandatory filing for Aurora, Illinois, employers who paid wages subject to unemployment tax, also called IRS Form 940. Key facts:
- 97 fields — ApronPrep auto-fills 81
- $0 government filing fees — no direct federal fee to file
- Timeline varies — file annually by January 31
Analyzed from Employer's Annual Federal Unemployment Tax Return
84% from one compliance interview
Manual entry or document upload required
Why You Need a Employer's Annual Federal Unemployment Tax Return
You are legally obligated to file the Employer's Annual Federal Unemployment Tax (FUTA) Return (Form 940) under the Internal Revenue Code (Title 26, Subtitle C, Chapter 23). This is a federal requirement administered by the IRS, not the state or city of Aurora. Illinois businesses must file this return if they paid wages of $1,500 or more in any calendar quarter or had at least one employee for some part of a day in any 20 different weeks. The return reconciles your quarterly payments and calculates your final annual FUTA tax liability, which funds the federal-state unemployment compensation system. Filing this return is a non-negotiable annual duty for covered employers.
Failing to file or pay your FUTA tax triggers automatic federal penalties and interest. The practical consequences are immediate and costly:
- Late-filing penalty: 5% of the unpaid tax per month, up to a maximum of 25%.
- Late-payment penalty: 0.5% of the unpaid tax per month, plus daily compounded interest on the overdue amount.
- Operational and financial risk
- Legal exposure: Willful failure to file or pay can lead to criminal prosecution for tax evasion, with potential fines and imprisonment.
Legal code: Internal Revenue Code (Title 26)
Recent update: The IRS typically adjusts the FUTA tax credit reduction and wage base annually; for 2026, confirm the current wage base and tax rate with the latest IRS instructions for Form 940 to ensure accurate calculation.
Who Needs a Employer's Annual Federal Unemployment Tax Return?
| Type | Required | Notes |
|---|---|---|
| Restaurant (Full-Service) | Required | Employers are liable for the Federal Unemployment Tax (FUTA) if they pay wages of $1,500 or more to employees in any calendar quarter or had at least one employee for some part of a day in any 20 different weeks during the year (IRS Pub. 15). |
| Bar / Nightclub | Required | Most establishments with W-2 employees, including bartenders, servers, and security, meet the FUTA liability thresholds for wages paid or weeks worked as defined by the Internal Revenue Code § 3306. |
| Food Truck | Required | Food truck operators with employees are subject to FUTA under the same federal employment tax rules as other employers, as the liability is based on employee count and payroll, not a fixed location. |
| Coffee Shop / Café | Required | If you have baristas or other employees on payroll, you are required to file Form 940 because the business operates as an employer under FUTA rules (IRS Topic No. 759). |
See which restaurant types need this requirement — and which don't.
See Full Requirements →Field-by-Field Guide (97 Fields)
81 of 97 auto-filledQ2 Tax Liability - Dollars (Line 16b)
textEnter the dollar amount of your Federal Unemployment Tax Act (FUTA) liability for the second quarter. Calculate this from your payroll records by applying the FUTA tax rate (0.6% for most employers after state credit) to your quarterly taxable wages.
COMMON MISTAKE: Entering cents in this dollar-only field or entering the total liability from Line 17 instead of the quarterly liability.
Q2 Tax Liability - Cents (Line 16b)
textEnter only the cents portion (the last two digits) of your second quarter FUTA tax liability. If your liability is an exact dollar amount, enter '00'.
COMMON MISTAKE: Entering the full dollar amount, leaving the field blank, or entering a single digit for cents (must be two digits).
Q3 Tax Liability - Dollars (Line 16c)
textEnter the dollar amount of your FUTA liability for the third quarter, calculated from your payroll records for that period.
COMMON MISTAKE: Mixing up quarterly amounts, for example entering Q4 liability here, or forgetting to calculate the liability separately for each quarter.
Q3 Tax Liability - Cents (Line 16c)
textEnter only the cents portion (the last two digits) of your third quarter FUTA tax liability. Enter '00' for exact dollar amounts.
COMMON MISTAKE: Repeating the cents from Q2, leaving the field blank, or entering non-numeric characters.
Q4 Tax Liability - Dollars (Line 16d)
textEnter the dollar amount of your FUTA liability for the fourth quarter, derived from your final quarterly payroll records.
COMMON MISTAKE: Entering a year-end total or a rounded estimate instead of the precise calculated liability for Q4.
Q4 Tax Liability - Cents (Line 16d)
textEnter only the cents portion (the last two digits) of your fourth quarter FUTA tax liability. Enter '00' for exact dollar amounts.
COMMON MISTAKE: Entering cents that don't match the dollar field, or copying cents from a previous quarter.
Other Third Party Filer
checkboxCheck this box only if you are a third-party preparer filing this form for the employer, such as a CPA or payroll service, and you are NOT a Certified Professional Employer Organization (CPEO) or a Section 3504 Agent.
COMMON MISTAKE: Checking multiple boxes in the 'Third Party Filer' section; you must check only one box that accurately describes your role.
Certified Professional Employer Organization
checkboxCheck this box only if you are a Certified Professional Employer Organization (CPEO) filing this return on behalf of client employers, as defined by IRS regulations.
COMMON MISTAKE: An employer checking this box incorrectly; this is for CPEOs only, not for the business itself.
Section 3504 Agent
checkboxCheck this box only if you are an agent authorized under IRS Code Section 3504 to report and pay employment taxes for the employer.
COMMON MISTAKE: Checking this box without the proper legal agency agreement, leading to incorrect tax responsibility attribution.
Account Type: Checking (Line 15d)
checkboxCheck this box if you are requesting a refund via Direct Deposit and the bank account you provided is a checking account.
COMMON MISTAKE: Checking both 'Checking' and 'Savings' boxes, or checking this box when you are not requesting a refund at all.
ApronPrep auto-fills 81 of 97 fields from a single compliance interview — no re-typing, no guessing what the government expects.
Top 5 Employer's Annual Federal Unemployment Tax Return Mistakes
1. Incorrectly Reporting the State Unemployment Tax (SUTA) Credit
Entering the wrong amount for your state unemployment tax credit on line 7 of Form 940, or leaving it blank if you paid taxes in Illinois, is the most common error. This directly triggers an IRS notice demanding payment for the full FUTA tax, plus interest and penalties. To avoid: Use the total SUTA payments you actually made to the Illinois Department of Employment Security (IDES) for the year, as recorded on your state quarterly contribution reports. Do not use an estimated figure.
2. Misclassifying Workers as Exempt
Assuming certain part-time, seasonal, or family-member workers are exempt from FUTA coverage. Misclassification leads to underpayment of tax and potential IRS assessments for back taxes and penalties. The IRS definition of an 'employee' for FUTA is broad. For example, paying a family member who works in the restaurant, even casually, likely makes them an employee whose wages are subject to FUTA. Review IRS Publication 15-A for guidelines.
3. Failing to Aggregate Wages Across Multiple Entities
If you own or control multiple restaurants or businesses (even under different LLCs), you must combine all wages paid to employees across those entities to determine if you've hit the $7,000 per-employee FUTA wage base. Reporting each entity separately can result in underpaying the tax. This mistake can lead to an IRS audit and recalculation across all related businesses. Maintain consolidated payroll records.
Skip the Paperwork on Your Employer's Annual Federal Unemployment Tax Return
ApronPrep auto-fills 81 of 97 fields from one compliance interview.
No credit card required
Employer's Annual Federal Unemployment Tax Return by City in Illinois
| City | Fee Range | Timeline |
|---|---|---|
| Aurora | ||
| Chicago | ||
| Rockford |
Timeline: Employer's Annual Federal Unemployment Tax Return
Gather Quarterly Wage and Tax Information
Compile your IRS Form 940 quarterly filings for the entire year and final payroll reports. You will need total wages paid subject to FUTA tax, any state unemployment tax (SUTA) payments made, and a record of any prior-year credit adjustments. Missing or mismatched wage totals between quarters is the most common cause of filing errors, which triggers IRS notices.
Complete IRS Form 940 for the Tax Year
Fill out the official IRS Form 940 for the applicable tax year, using your annual totals. Key sections include calculating your FUTA tax liability, applying the 5.4% credit for timely-paid state unemployment taxes, and determining any balance due. Most filers complete this online via the IRS website or commercial tax software. Errors in the credit calculation or in reporting wages over the $7,000 per-employee wage base are frequent audit triggers.
File Form 940 with the IRS by January 31
Submit your completed Form 940 to the IRS by the January 31 deadline. Electronic filing through the IRS Modernized e-File (MeF) system is required for most employers. Ensure you have your Employer Identification Number (EIN) and payment information ready if a balance is due. Paper filings are processed more slowly and significantly increase the risk of transcription errors.
Other Requirements You'll Need
This is one of 13 requirements for opening a restaurant in Illinois.
ADA Compliance Self-Certification
federal
Alarm System Permit/Registration
local
Alcohol Server Training Certification (BASSET)
state
Annual Report Filing
state
See all co-required forms and how they connect to your compliance dossier.
See All RequirementsThe processing time for the Employer's Annual Federal Unemployment Tax Return (Form 940) varies and is not defined by the City of Aurora. This is a federal form submitted to the IRS, which generally processes returns upon receipt. To confirm current IRS processing timelines for a given tax year, contact the Internal Revenue Service directly or visit the IRS website.
There is no government filing fee ($0–$0) to submit this federal tax return to the IRS. However, this form calculates your business's liability for the Federal Unemployment Tax Act (FUTA), which is a tax payment, not a fee. You must also be aware of state-level unemployment insurance obligations, which are separate from this federal return.
No. The Employer's Annual Federal Unemployment Tax Return (Form 940) is not a transferable permit; it is an annual tax filing for your business's federal Employer Identification Number (EIN). If you move your business, you must update your address with the IRS and on future filings. A business relocation may also trigger the need for a local City Business License/Registration update in Aurora.
You must file this return annually. Form 940 is due by January 31 for the preceding calendar year, per IRS regulations. This is a recurring federal obligation distinct from other annual filings, such as your state's Annual Report Filing with the Illinois Secretary of State. Not legal advice — verify due dates with the IRS.
There is no physical inspection for this federal tax return. Compliance is verified through your filed documentation and payroll records. The IRS may conduct a desk audit or request supporting documents to verify the wages and tax calculations reported. This process is separate from local health or safety inspections required for permits like a Certificate of Occupancy.
About This Data
This guide is generated from ApronPrep's compliance dossier system, which uses 53 parallel AI authority experts to discover requirements, then downloads actual forms and generates field-level intelligence for each one.
For Illinois specifically, we have analyzed compliance dossiers for 3 cities (Aurora, Chicago, Rockford), generating Rich FILs (Form Intelligence Layers) with 97 form fields analyzed for this requirement. Fee data is sourced from actual county department fee schedules, not estimates.
Our data is verified against official government sources and updated when regulatory changes are detected. If you find an error, please report it — accuracy is our core commitment.
Sources
- Internal Revenue Code (Title 26)
This Form Is One of 60+ Requirements.
ApronPrep discovers every permit your city requires — including the ones generic checklists miss. Pick your city for the complete package.