Form 940 (FUTA) COVID Penalty Refund

Form 940 (annual federal unemployment tax) penalties assessed during Jan 20, 2020 – July 10, 2023 may be eligible for refunds under Kwong. The 2020, 2021, and 2022 Form 940 filings (each due Jan 31 of the following year) all fall within the window. File Form 843 by July 10, 2026. Refund eligibility is not guaranteed; Kwong is being appealed.

Who qualifies

Employers required to file Form 940 annually for federal unemployment tax (FUTA) — and assessed late-filing or late-payment penalties during the Jan 20, 2020 – July 10, 2023 window — may have a claim. The 2020 (due Jan 31, 2021), 2021 (due Jan 31, 2022), and 2022 (due Jan 31, 2023) Form 940s all fall squarely within the suspended-deadline window.

• Employer account transcript shows a Form 940 penalty assessment dated between Jan 20, 2020 and July 10, 2023.
• The penalty applied to a FUTA tax year of 2019, 2020, 2021, or 2022.
• The same Kwong reasoning applies whether the penalty was assessed automatically by the IRS or after correspondence.

How much could I get back?

Form 940 penalties tend to be smaller than Form 941 (quarterly) since FUTA tax bases are lower, but multiple-year exposure is common. Typical refunds for affected employers range from a few hundred to a few thousand dollars per affected year. Refund eligibility and amounts cannot be guaranteed.

Why this specifically

FUTA filings are easy to overlook in a refund analysis because the dollar amounts are smaller than Form 941. But the deadline mechanics are identical, and the same Kwong reasoning applies. For employers reviewing all payroll-related penalty assessments, Form 940 belongs in the analysis.

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