Form 941 Penalties - Late Filing, Late Payment & Failure to File
Written by Stephanie Glanville
Stephanie Glanville is the Marketing Manager of TaxBandits. She has several years of experience with IRS tax forms and the funtionality of TaxBandits. With a passion to help business owners better understand their IRS tax forms and filing, she aims to create content that is valuable and informative.
IRS Form 941 Penalties - Late Filing and Late Payment
Businesses will be imposed with penalties for late filing of 941. The penalties are calculated based on how many days the return is overdue. Additionally, a late payment of 941 will incur further penalties.
How to calculate the 941 late filing penalty?
The failure to file 941 penalty is determined on how late you file your return and the amount of unpaid tax as of the original payment due date.
- The business will incur a penalty of 5% of the total tax amount due or part of a month that a tax return is late. The penalty will max up to 25% of the unpaid taxes.
- If both the 941 late filing and late Pay penalty are applied in the same month, the late filing penalty is reduced by the amount of the Failure to Pay penalty for that month, for a combined penalty of 5% for each month or part of a month that the return was late.
- If the payment isn’t made even after 5 months, the late filing penalty will be maximum, but the late payment penalty will continue until the tax is paid.
- If the return late more than 60 days, the minimum late filing penalty is the amount shown below or 100% of the underpayment, whichever is less:
| If return due date is between | Minimum Amount |
|---|---|
| 01/01/2020 and 12/31/2022 | $435.00 |
| 01/01/2023 and 12/31/2023 | $450.00 |
| After 12/31/2023 | $485.00 |
Note: The penalty rate for failure to file Form 944 by the due date is the same as that of
Form 941.
Failure to deposit penalty:
| No. of Days the payment delayed | Penalty Amount |
|---|---|
| One to five Calendar days | 2% of unpaid tax |
| Six to fifteen Calendar days | 5% of unpaid tax |
| More than 15 Calendar days | 10% of unpaid tax |
| More than 10 calendar days after receiving the first notice or letter from the IRS | 15% of unpaid tax |
Pay your 941 taxes before due to avoid late payment penalties.
Quick Info:
The penalty amounts don’t add up. For example, if the tax deposit is delayed by more than 15 calendar days, the IRS doesn’t add a 10% penalty with the earlier penalties (2% and 5%). Instead, the new total penalty would be 10%.
When is the 941 late payment penalty applicable?
The 941 late payment penalty applies to businesses that fail make employment tax deposits:
- On or before due date
- In 2024, the social security and medicare tax apply to Household employees who are paid $2,700 or more.
- In the right amount
- In the right way
These employment taxes include Federal income tax, FICA Taxes (Social Security & Medicare tax), and FUTA tax.
For example: Consider, you are responsible for paying $3000 to the IRS for the quarter and you have deposited your taxes after 20 days from the deadline. Now the IRS will impose a penalty and send you a notice regarding the late payment. In this case, you will be liable for paying a penalty of $300 which is a 10% penalty rate of your taxes.
Related Topics
IRS Form 941
- Form 941
- Form 941 Instructions
- Form 941 Due Dates
- Form 941 Mailing Address
- Form 941 Schedule B
- Form 941 Penalty
- Form 941 ERC
- Form 940 vs 941
- Form 941 vs 944
Revised Form 941 for 2023
Form 941 Worksheets
- Form 941 Worksheet 4 for Q3 & Q4 2021
- Form 941 Worksheet 2 for Q2 2021
- Form 941 Worksheet 1
- Form 941 Worksheets
IRS Form 941-X
Revised Form 941 for 2022
Revised Form 941 for 2021
- IRS Form 941 for Q4 2021
- Revised Form 941 for 2nd Quarter, 2021
- Form 941 Quarter 2 vs Quarter 1, 2021
- Revised Form 941 Schedule R for Q2 2021
- Revised Form 941 for 1st Quarter, 2021
