Employer's Annual Federal Unemployment Tax Return in Tacoma, Washington (2026)
Failing to file your annual FUTA return triggers IRS penalties and can affect your state unemployment tax rate, delaying any potential refunds or adjustments. The Employer's Annual Federal Unemployment Tax Return (Form 940) must be submitted to the Internal Revenue Service (IRS) by employers in Tacoma, Washington. Key facts:
- 97 fields — ApronPrep auto-fills 81
- $0–$0 government filing fees
- Varies processing time
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
The Employer's Annual Federal Unemployment Tax Return (Form 940) is mandated by federal law, specifically under the Federal Unemployment Tax Act (FUTA) in Internal Revenue Code (Title 26), Subtitle C, Chapter 23. This requirement applies to you in Tacoma, Washington, the same as it does for employers nationwide. The IRS requires this return to calculate and collect the federal unemployment tax, which funds state workforce agencies and half of extended unemployment benefits. Even if you pay Washington state unemployment taxes (SUTA), you must file this separate federal form if you paid wages of $1,500 or more in any calendar quarter or had at least one employee for 20 weeks in the current or prior year.
Failing to file or pay correctly triggers immediate and compounding penalties that directly impact your restaurant's finances and legal standing. Consequences 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 total due from the original due date.
- Operational & financial risk: Persistent non-compliance can lead to IRS levies on your business bank accounts or assets. A tax lien can also disrupt relationships with lenders during loan renewals and may violate the good-standing clauses in your commercial lease.
- Criminal prosecution: In cases of willful fraud or evasion, responsible parties can face criminal charges, including substantial fines and imprisonment.
Legal code: Internal Revenue Code (Title 26)
Recent update: For the 2026 tax year, the IRS has confirmed the FUTA tax rate remains at 6.0% on the first $7,000 of each employee's wages, but verify the wage base annually as it is subject to change.
Who Needs a Employer's Annual Federal Unemployment Tax Return?
| Type | Required | Notes |
|---|---|---|
| Restaurant (Full-Service) | Required | Required if you paid wages of $1,500 or more in any calendar quarter in 2025 or 2026, or had at least one employee for 20 weeks, as defined by the Federal Unemployment Tax Act (FUTA, 26 U.S.C. § 3301). |
| Bar / Nightclub | Required | Required under the same FUTA thresholds: paying $1,500+ in quarterly wages or employing at least one person for 20 weeks in the calendar year. |
| Food Truck | Required | Required if you meet the FUTA employee threshold. Mobile operations with employees are not exempt from federal unemployment tax obligations. |
| Coffee Shop / Café | Required | Required if you have paid employees and meet the $1,500 quarterly wage threshold, as per standard IRS FUTA guidelines. |
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 FUTA tax liability for the second quarter (April–June) before any credits, calculated from wages paid, which ApronPrep auto-fills based on your payroll data.
COMMON MISTAKE: Entering a value that is net of state unemployment tax credits, which should be reported on a separate line, causing a mismatch with reported payments and triggering an IRS notice.
Q2 Tax Liability - Cents (Line 16b)
textEnter the two-digit cents portion of your Q2 FUTA tax liability, which ApronPrep calculates and provides from your payroll data to complete the amount.
COMMON MISTAKE: Leaving this field blank or entering a one-digit number (e.g., '5' instead of '05'), resulting in an incorrect dollar total and a processing error.
Q3 Tax Liability - Dollars (Line 16c)
textEnter the dollar amount of your FUTA tax liability for the third quarter (July–September) before any credits, which ApronPrep auto-fills from your provided payroll records.
COMMON MISTAKE: Copying the Q2 dollar amount into this field instead of calculating the correct Q3 liability, creating a discrepancy that can lead to an IRS penalty assessment.
Q3 Tax Liability - Cents (Line 16c)
textEnter the two-digit cents portion for your Q3 FUTA tax liability, automatically populated by ApronPrep to ensure accurate reporting.
COMMON MISTAKE: Incorrectly transposing digits from the dollar amount or entering cents that do not match your quarterly wage records, causing a math verification failure.
Q4 Tax Liability - Dollars (Line 16d)
textEnter the dollar amount of your FUTA tax liability for the fourth quarter (October–December) before any credits, a value ApronPrep auto-fills based on your annual payroll summary.
COMMON MISTAKE: Forgetting to include year-end bonus payments or other taxable wages paid in December, leading to an underreported liability and potential underpayment penalties.
Q4 Tax Liability - Cents (Line 16d)
textEnter the two-digit cents portion for your Q4 FUTA tax liability, provided by ApronPrep to finalize the quarterly reporting.
COMMON MISTAKE: Entering the cents as a percentage (e.g., '06' for 6%) instead of the actual monetary cents, which will cause the form's calculated totals to be incorrect.
Other Third Party Filer
checkboxCheck this box only if you are a third-party payer (other than a CPEO or 3504 Agent) filing this return on behalf of the employer, as defined by IRS guidelines.
COMMON MISTAKE: An employer incorrectly checking this box when they are filing their own return, which misrepresents the filing entity and can delay processing.
Certified Professional Employer Organization
checkboxCheck this box if you are a Certified Professional Employer Organization (CPEO) filing a consolidated FUTA return for client employers under your certification.
COMMON MISTAKE: A regular employer or non-certified PEO checking this box, which is reserved for IRS-certified entities and can invalidate the filing status.
Section 3504 Agent
checkboxCheck this box if you are an agent authorized under IRS Section 3504 to report and pay employment taxes for the employer.
COMMON MISTAKE: A payroll service provider that has not been formally designated as a Section 3504 agent checking this box, which constitutes an incorrect legal declaration.
Account Type: Checking (Line 15d)
checkboxCheck this box to indicate you are requesting any potential refund be deposited into a checking account, not a savings account.
COMMON MISTAKE: Checking both 'Checking' and 'Savings' boxes for the same account, which provides conflicting instructions to the IRS and can delay a refund.
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. Calculating FUTA Tax Using the Wrong Wage Base
Using the total annual wages paid, instead of only the first $7,000 paid to each employee (the FUTA wage base), leads to significant overpayment and a prolonged refund process. For example, if you pay an employee $50,000, only $7,000 of that is taxable for FUTA. Avoiding this requires reviewing each employee's year-to-date earnings before the 4th quarter. Miscalculation is a primary reason for amended returns, which can delay your overall tax filing closure by 6-8 weeks.
2. Missing the State Credit Reduction on Schedule A
Failing to check if Washington State has a credit reduction and incorrectly claiming the full 5.4% credit on Line 10 of Form 940 results in underpayment and IRS penalties. The U.S. Department of Labor announces states with reduced credits; for 2026, Washington does not have a reduction, but this must be verified annually. Based on ApronPrep's analysis, this omission is a common audit trigger, leading to interest charges on the unpaid balance from the original January 31 due date.
3. Entering Incorrect Employer Identification Number (EIN)
Transposing numbers or using an old EIN from a prior business entity causes the IRS to misapply your payment, potentially flagging your account for non-filing. A single digit error, like entering 12-3456789 instead of 12-3456798, creates this issue. This mistake requires contacting the IRS Business & Specialty Tax Line to resolve, adding a minimum of 3-4 weeks to your processing timeline as payments are traced and reallocated.
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 Washington
| City | Fee Range | Timeline |
|---|---|---|
| Seattle | ||
| Spokane | ||
| Tacoma |
Timeline: Key Filing Steps & Deadlines
Gather Quarterly Wage and Tax Data
Compile IRS Forms 940 for the year, state unemployment (SUTA) tax reports, and a detailed payroll summary listing total wages paid and any state unemployment contributions made for all four quarters. You will need your Employer Identification Number (EIN) and the total taxable wages paid (first $7,000 per employee per year). The most common mistake is using incorrect or inconsistent wage totals between state and federal reports, which triggers an IRS notice.
Complete Form 940
Fill out the current-year IRS Form 940. Calculate your FUTA tax liability (typically 0.6% on the first $7,000 of each employee's annual wages after applying the maximum 5.4% credit for timely state tax payments). Use the EFTPS (Electronic Federal Tax Payment System) to make any required deposit payments if your annual liability exceeds $500. Missing the state credit calculation is a top error leading to overpayment.
File with the IRS by January 31
Submit your completed Form 940 to the IRS. E-filing through the IRS website or an authorized provider is mandatory for most businesses. You must also pay any remaining balance due via EFTPS. Filing after the January 31 deadline incurs a penalty of 5% of the unpaid tax per month, up to 25%. Keep a copy of the filing confirmation for your records.
Other Requirements You'll Need
This is one of 13 requirements for opening a restaurant in Washington.
ADA Compliance Self-Certification
federal
Alarm System Permit/Registration
local
Annual Report Filing
state
Application for Employer Identification Number
federal
See all co-required forms and how they connect to your compliance dossier.
See All RequirementsThere is no standard processing timeline from the IRS for receiving or processing the completed Form 940, the Employer’s Annual Federal Unemployment Tax Return. Filing deadlines are the key metric—the return is due annually by January 31 for the prior calendar year. The primary time commitment is the preparation and submission; you must complete it whether you are filing from Tacoma or any other location. Contact the IRS or a tax professional to confirm current processing times for any correspondence.
There is no government filing fee to submit the federal Form 940 itself. This federally mandated tax return does not have a local Tacoma fee; your cost is the calculated federal unemployment tax (FUTA) liability you must pay. The FUTA tax rate is 6.0% on the first $7,000 of each employee's annual wages, but employers typically receive a credit of up to 5.4% for timely state unemployment tax payments, resulting in an effective federal rate of 0.6%. Not legal advice — verify your tax liability with the IRS or a qualified tax advisor.
No, the federal Form 940 is not a document that can be transferred. If your business moves to a new location in Tacoma or elsewhere, you must update your address directly with the IRS for all tax accounts. This is often done by filing Application for Employer Identification Number Form SS-4 or by notifying the IRS in writing. Failure to update your address can result in penalties for missing tax notices or filings.
You do not 'renew' this tax return—you must file it every year, on an annual basis. The Employer’s Annual Federal Unemployment Tax Return (Form 940) is a recurring annual filing obligation for as long as you have employees and are subject to FUTA tax. The filing deadline is January 31 for the prior calendar year. Missing this annual deadline triggers penalties and interest. This filing frequency is separate from other local renewals like an annual Annual Report Filing with the Washington Secretary of State.
There is no physical inspection for the federal Form 940 filing. The 'inspection' is an audit of your payroll records conducted by the IRS or state workforce agency to verify wage reports and tax payments. This audit can be triggered randomly or by discrepancies in your filings. You must maintain accurate payroll records for at least four years, including details on wages paid, to support your Form 940 calculations during such a review.
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 Washington specifically, we have analyzed compliance dossiers for 3 cities (Seattle, Spokane, Tacoma), 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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