Employer's Annual Federal Unemployment Tax Return in Salem, Oregon (2026)
Without your filed Employer's Annual Federal Unemployment Tax Return (also called the federal FUTA return or Form 940), your business faces IRS penalties and interest that compound daily, and you risk losing your ability to claim federal tax credits on state unemployment taxes. This IRS requirement must be submitted annually for any business in Salem, Oregon that paid unemployment wages. Key facts:
- 97 fields — ApronPrep auto-fills 81
- $0–$0 government filing fees — The IRS does not charge a fee to file this return
- Varies processing time — The IRS does not provide a public timeline for form acceptance
Most applicants complete this form in under 15 minutes with ApronPrep, which auto-fills 81 of 97 fields.
Analyzed from Employer's Annual Federal Unemployment Tax Return
84% from one compliance interview
Manual entry or document upload required
Why You Need an Employer's Annual Federal Unemployment Tax Return
The Employer's Annual Federal Unemployment Tax Return (Form 940) is a mandatory federal filing for employers in Salem, Oregon, and nationwide, as stipulated by the Internal Revenue Code (Title 26), specifically under Subtitle C—Employment Taxes and Collection of Income Tax. This federal law requires you to pay the Federal Unemployment Tax Act (FUTA) tax, which funds state workforce agencies and unemployment benefits. The requirement applies to any business that paid wages of $1,500 or more in any calendar quarter in the current or previous year, or had one or more employees for at least some part of a day in any 20 or more different weeks. The filing is enforced by the Internal Revenue Service (IRS), not by Oregon's state or city authorities, meaning Salem-based restaurants must comply with these federal rules in addition to any state-level unemployment insurance obligations.
Failure to correctly file and pay your FUTA tax by the federal deadline triggers a cascade of financial penalties and legal risks that directly threaten your restaurant's cash flow and operational status. The consequences are not managed by local Salem agencies but by the IRS's national enforcement. Common penalties include:
- Failure-to-file penalty: 5% of the unpaid tax per month, up to a maximum of 25%.
- Failure-to-pay penalty: 0.5% of the unpaid tax per month, plus interest charged on the overdue amount from the due date.
- Operational & financial risk: Accumulating penalties and interest can create a significant, unexpected financial burden. In severe cases of intentional evasion, the IRS can pursue criminal prosecution. Furthermore, an unresolved federal tax debt can complicate lease agreements (if your landlord runs a credit check), affect your ability to secure business loans, and lead to enforced collection actions such as liens or levies on your business bank accounts.
Legal code: Internal Revenue Code (Title 26)
Recent update: For the 2026 tax year, the IRS has not announced major procedural changes to Form 940; however, employers must verify the current year's filing deadline and any potential electronic filing mandates on the IRS website.
Who Needs a Employer's Annual Federal Unemployment Tax Return?
| Type | Required | Notes |
|---|---|---|
| Restaurant (Full-Service) | Required | Required if you paid $1,500 or more in wages during any calendar quarter in 2025 or 2026, or had at least one employee for some part of a day in any 20 different weeks, as per IRS FUTA regulations (IRC Chapter 23). |
| Bar / Nightclub | Required | Required if you meet the FUTA threshold of paying $1,500+ in quarterly wages or employing at least one person in 20+ weeks, as this tax applies to all cash wages paid to employees (IRS Form 940 Instructions). |
| Food Truck | Required | Required if you have employees and meet the FUTA threshold; sole proprietors with no employees are exempt from filing, but any hired drivers or cooks trigger the requirement. |
| Coffee Shop / Café | Required | Required if you have employees on payroll; FUTA liability begins once you pay $1,500 or more in total wages in a calendar quarter (IRC §3306(a)(1)). |
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 whole dollar amount of your Federal Unemployment Tax Act (FUTA) tax liability for Quarter 2 (April-June), calculated as the first $7,000 of each employee's annual wages multiplied by the FUTA tax rate.
COMMON MISTAKE: Entering the total tax *paid* (Line 19) instead of the calculated liability, or using the wrong wage base, which causes an arithmetic mismatch and triggers IRS correspondence.
Q2 Tax Liability - Cents (Line 16b)
textEnter the cents portion (two digits) of your FUTA tax liability for Quarter 2, which is calculated from your payroll records.
COMMON MISTAKE: Leaving this field blank when the dollar field is populated, or entering more than two digits, which the IRS system cannot process.
Q3 Tax Liability - Dollars (Line 16c)
textEnter the whole dollar amount of your FUTA tax liability for Quarter 3 (July-September), based on wages paid during that period.
COMMON MISTAKE: Transposing numbers from quarterly payroll reports, leading to a discrepancy that requires filing an amended Form 940.
Q3 Tax Liability - Cents (Line 16c)
textEnter the two-digit cents portion of your FUTA tax liability for Quarter 3.
Q4 Tax Liability - Dollars (Line 16d)
textEnter the whole dollar amount of your FUTA tax liability for Quarter 4 (October-December).
COMMON MISTAKE: Failing to account for annual wage limits correctly in Q4, which is common if employees reached the $7,000 wage base earlier in the year.
Q4 Tax Liability - Cents (Line 16d)
textEnter the two-digit cents portion of your FUTA tax liability for Quarter 4.
Other Third Party Filer
checkboxCheck this box only if you are a third-party filer (e.g., a payroll service) preparing the return on behalf of the employer, but you are not a Certified Professional Employer Organization (CPEO) or a Section 3504 Agent.
COMMON MISTAKE: Employers incorrectly checking this box themselves, which misrepresents the filer type to the IRS and can affect payment and notice routing.
Certified Professional Employer Organization
checkboxCheck this box only if you are a Certified Professional Employer Organization (CPEO) filing this aggregate return for client employers, as defined by IRS regulations.
COMMON MISTAKE: A CPEO failing to check this box, which prevents the IRS from applying the correct CPEO filing rules and credit allowances.
Section 3504 Agent
checkboxCheck this box only if you are an agent under IRS Section 3504 who is responsible for filing and paying employment taxes for the client employer.
COMMON MISTAKE: Confusing a Section 3504 Agent with a standard payroll service; checking this without the proper designation transfers legal liability incorrectly.
Account Type: Checking (Line 15d)
checkboxCheck this box if you are requesting a refund via direct deposit and the bank account provided is a checking account.
COMMON MISTAKE: Checking both 'Checking' and 'Savings' or leaving both blank when a refund is requested, which causes the direct deposit request to be rejected.
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 State Unemployment Tax (SUTA) Payments
Reporting SUTA payments on the wrong line of Form 940 or failing to claim the maximum allowable credit (up to 5.4% of the first $7,000 of each employee's wages) for state taxes paid. This mistake directly increases your federal tax liability and can trigger IRS correspondence or an underpayment penalty, adding 4-8 weeks to resolve. To avoid, reconcile your state unemployment tax filings (Form 132) with your federal Form 940 Schedule A before submission.
2. Misclassifying Workers as Independent Contractors
Failing to report wages paid to workers who are legally employees under IRS common-law rules. This omission understates your FUTA tax base. The IRS can reclassify these workers, resulting in back taxes, penalties, and interest for unpaid FUTA (and FICA) taxes. To avoid, review IRS guidelines (Publication 15-A) and the Oregon Employment Department's criteria for employee status before filing.
3. Miscalculating the FUTA Wage Base
Applying the federal FUTA tax rate (0.6% for 2026) to wages beyond the first $7,000 paid to each employee per calendar year. Overpaying tax is common, but underpaying due to this error leads to penalties. The correct calculation is: total wages subject to FUTA (capped at $7,000 per employee) × 0.006. Double-check that payroll software or manual calculations stop at the $7,000 cap for each individual.
Skip the Paperwork on Your Employer's Annual Federal Unemployment Tax Return
ApronPrep auto-fills 81 of 97 fields from one compliance interview.
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Employer's Annual Federal Unemployment Tax Return by City in Oregon
| City | Fee Range | Timeline |
|---|---|---|
| Eugene | ||
| Portland | ||
| Salem |
Timeline: Varies
Gather Quarterly Wage and Tax Records
Compile your completed quarterly Form 940 or 940-Schedule H for the year, along with all state unemployment (SUTA) tax returns filed with Oregon's Employment Department (OED). You will need precise, annual totals for wages subject to Federal Unemployment Tax (FUTA) and any state unemployment tax paid, as these figures must be reconciled. Missing or mismatched data between state and federal filings is the most common cause of math error notices from the IRS.
Complete and File Form 940 for the Tax Year
Using your compiled records, fill out IRS Form 940, 'Employer's Annual Federal Unemployment Tax Return,' for the applicable tax year. In Salem, this is filed directly with the IRS, not a local Oregon agency. The form requires your Employer Identification Number (EIN), FUTA taxable wages paid, and the calculation of your FUTA tax liability (typically 0.6% after credits). You must file by January 31 of the following year. Use the IRS's Electronic Federal Tax Payment System (EFTPS) for any required payment to avoid penalties.
Await IRS Processing and Correspondence
After filing, the IRS processes your return, which typically takes 4-6 weeks. Monitor your IRS online account or mailed correspondence for any notices, especially if your reported state unemployment tax credits do not match Oregon's records sent to the IRS. If you receive a notice (like CP2100), you will need to respond with documentation from the Oregon Employment Department to resolve the discrepancy.
Other Requirements You'll Need
This is one of 13 requirements for opening a restaurant in Oregon.
ADA Compliance Self-Certification
federal
Alarm System Permit/Registration
local
Application for Employer Identification Number
federal
Articles of Organization (LLC) or Articles of Incorporation (Corporation)
state
See all co-required forms and how they connect to your compliance dossier.
See All RequirementsProcessing time varies and is not defined by a single deadline. The federal form is submitted annually, but receiving confirmation or handling inquiries from the IRS can take several weeks. You must check the IRS website for the official filing date, as failure to file on time triggers penalties regardless of processing delays.
There are no direct government filing fees for submitting the form itself. However, the cost is the FUTA tax you calculate and owe based on employee wages, which is 6.0% of the first $7,000 paid to each employee per year. This is a tax liability, not a processing fee, and must be paid via EFTPS Enrollment (Electronic Federal Tax Payment System). Not legal advice — verify calculations with the IRS.
No, the federal FUTA tax account and filing requirement are tied to your Employer Identification Number (EIN), not a specific location. If you move your business within Salem or Oregon, you must update your address with the IRS using Form 8822-B. You should also update your local business address with the City Business License/Registration to ensure other local permits remain valid.
You file this return annually. Form 940 is due by January 31 for the previous calendar year, though you may have a later deadline if you deposited all FUTA tax when due. There is no separate "renewal"; it is a recurring annual filing obligation as long as you have employees and meet the liability thresholds set by federal law.
There is typically no physical inspection for this federal tax form. Compliance is verified through record audits conducted by the IRS or state workforce agencies like the Oregon Employment Department. They will review your payroll records, tax filings, and employee classifications to ensure accurate reporting and payment of unemployment taxes.
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 Oregon specifically, we have analyzed compliance dossiers for 3 cities (Eugene, Portland, Salem), 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)
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