Form 941 Due October 31: The FUTA Deposit and the W-9 Sweep
If you have employees, three things need to happen by the end of October: file the third-quarter Form 941, make a FUTA deposit if your federal unemployment liability has crossed $500, and sweep your vendor list for every contractor who could cross $2,000 in payments this year and doesn’t have a W-9 on file. The Form 941 due date for Q3 is October 31, and because October 31, 2026 falls on a Saturday, the filing is actually due Monday, November 2.
We run an accounting firm with payroll in-house, so this is a week we plan around every quarter. Here’s what each of the three items involves and why the third one, the W-9 sweep, is the one that saves you the most grief.
When is Form 941 due for the third quarter?
Form 941 reports the wages you paid, the federal income tax you withheld, and both halves of Social Security and Medicare for July through September. It’s due the last day of the month after the quarter ends: October 31, or the next business day when that’s a weekend, which is November 2 this year. If you deposited every dollar of payroll tax on time during the quarter, you get about ten extra days to file the form itself, but the deposits are the part the IRS cares about, and those are already due.
The mistake we see on 941s prepared without the books in front of the preparer is simple: the wages on the form don’t match the wages in the ledger. A bonus run through a separate check. A final paycheck for someone who left in August. Owner health insurance that should have gone through payroll. Every one of those creates a gap between the 941 and the general ledger, and in January that same gap shows up between the four 941s and the W-2s. The IRS matches those totals. When they don’t agree, you get a letter.
So the 941 isn’t a form you file and forget. It’s a tie-out. Total wages on the 941 should equal the payroll expense in the books for the quarter, and the payroll liabilities on the balance sheet should equal what you still owe. If nobody has checked that, the 941 is a guess with a signature on it.
When is the FUTA deposit due?
Federal unemployment tax is small, which is exactly why it gets missed. It’s 6.0% on the first $7,000 of each employee’s wages, reduced to 0.6% for most employers by the credit for state unemployment tax paid. For a ten-person shop that works out to a few hundred dollars for the entire year.
The deposit rule is cumulative. When your FUTA liability for the year passes $500 at the end of any quarter, you deposit it by the last day of the following month, through EFTPS. If it’s $500 or less, you carry it forward to the next quarter. Most small employers cross $500 sometime in the second or third quarter, which means the Q3 deposit, due November 2 this year, is often the first one of the year and the one that gets forgotten.
The penalty for a missed or late deposit is a percentage of the amount, and on a few hundred dollars that’s not much money. The problem is the notice. A FUTA penalty notice arrives in the spring, gets forwarded to your accountant, takes an hour to sort out, and lands on the same desk that’s trying to close your year. It’s a disproportionate amount of attention for a deposit that takes four minutes to make on time.
When should I collect W-9s from contractors?
Before the first payment. That’s the rule, and if you already follow it, this section is a short one.
If you don’t, October is when to fix it. The reason is leverage. A contractor you’re still sending work to returns a W-9 the same day you ask. A contractor you paid in April and haven’t used since has no reason to answer your email in January, and every January that’s the person your accountant is waiting on.
The sweep is a fifteen-minute job. Pull the vendor list from your accounting system for the year to date. Filter for anyone paid by check, ACH, wire, or cash. For each one who’s crossed $2,000, or plausibly will by December, check whether a W-9 is on file. Anyone missing one gets an email this week, while they’re still on the schedule. Payments by credit card or through a payment app that files its own reporting come off your list, because the processor reports those, not you.
The 2026 threshold: $2,000
For payments made in 2026, the threshold for filing a 1099-NEC or 1099-MISC moved from $600 to $2,000. That’s a real reduction in the number of forms most small businesses will file this January.
It does not change who you collect a W-9 from. In October, you don’t know which vendor will cross $2,000 by December, and a $1,400 contractor in October is a $2,300 contractor after one more job. Collect the W-9 from everyone you pay outside of payroll. Sort out who needs a form in January, when the year’s totals are final. The W-9 also tells you whether the vendor is a corporation, which usually means no form, and whether the taxpayer ID is right, which you’ll want to know before the IRS tells you it isn’t.
What a CFO does with this number
The 941 and the vendor sweep together produce one number most owners never look at: total labor, employees plus contractors. A fractional CFO reads that number three ways.
- Concentration. If one contractor is a third of your outside spend, you have a dependency. Their rate increase is your margin problem, and their departure is your delivery problem. Better to know that in October than in the week they leave.
- Classification. A contractor paid every two weeks all year, on your schedule, with your equipment, looks like an employee to the state. The vendor list is where that risk shows up first, and converting them on your terms is cheaper than being told to.
- True labor cost. Payroll alone understates what it costs to deliver your work. Payroll plus contractor spend, as a percent of revenue, is the number pricing decisions should be built on.
None of that is available if the wages on the 941 don’t tie to the books and the vendor list is a mystery until January.
Where we come in
Our payroll clients don’t think about the 941 or the FUTA deposit; the forms and deposits are built from the same ledger we close every month, so the totals tie by construction. And our monthly close includes a vendor check: anyone paid this month without a W-9 on file gets flagged and chased now, not in January. If your third quarter is a stack of paperwork you’re not sure ties to anything, reach out. We’ll look at the 941, the deposit schedule, and the vendor list in one sitting and tell you what’s missing.
Frequently asked questions
When is the Q3 941 due?
October 31, for wages paid July through September. In 2026, October 31 falls on a Saturday, so the due date moves to Monday, November 2.
When is a FUTA deposit required?
When your cumulative federal unemployment liability exceeds $500, the deposit is due by the end of the month following the quarter.
When should I collect W-9s?
Before the first payment, and in any case now, while you’re still sending the contractor work.
