Annual Filing. If you have been approved by the Minnesota Department of Revenue to be an annual filer, you do not file quarterly returns. Your annual withholding tax return is due by January 31 of the year following the end of the taxable year. The return must be filed electronically using Minnesota Department of Revenue e-Services. Forms Deposits through EFTPS require no coupon. Deposits of Minnesota taxes are made using the Minnesota e-Services system, by touchtone phone, or by mail using a payment voucher. Quarterly returns are filed using federal Form 941, Employer’s Quarterly Federal Tax Return. State returns must be filed electronically using the Minnesota Department of Revenue e-Services. Note: both federal and state returns must be filed, even if all deposits have been made or there is zero tax due. You must file a zero withholding tax return. Due Dates All federal quarterly 941 returns are due April 30, July 31, October 31 and January 31. Minnesota quarterly withholding returns are due April 30, July 31, October 31, and January 31. The return for annual filers is due January 31. Federal returns and deposits and state deposits and returns will be considered on time if received or postmarked on or before the due date. The postmark must be a United States postmark and must not be from a postage meter. If deposits are made electronically, refer to the specific instructions for the type of deposit. WITHHOLDING TAX PENALTIES AND INTEREST Both the Internal Revenue Service and the Minnesota Department of Revenue assess penalties and interest for the failure to make deposits on time, the failure to file required returns on time, and the failure to file Form W-2 and 1099 forms. The amount of penalty for late deposits or late filing is based on the length of time the payment or return is late. The Internal Revenue Service imposes a penalty on failure to provide correct information on W-2 forms, and failure to provide a correct Taxpayer Identification Number. In addition, the Minnesota Department of Revenue imposes a penalty on failure to provide Form W-2 information to the department and for refusing to provide all information required on the forms. Any person responsible for paying withholding tax may be held personally liable for failure to do so. A penalty equal to 100 percent of the amount of income tax, Social Security and Medicare tax, withheld from an employee’s paycheck, may also be imposed. The IRS calls this the Trust Fund Recovery penalty. Interest is assessed on unpaid withholding tax (plus penalties). Interest accrues from the date the payment should have been made to the date the payment actually is made. The interest rate is adjusted to reflect market rates.
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