Fillable Form 945-A - Annual Record Of Federal Tax Liability (Page 3 of 3) in pdf

Form 945-A (Rev. 8-2003)

Page

General Instructions

Example 3. Because Elm Co. is a new business, it is a monthly

schedule depositor for 2003. During January, it withheld income

Purpose of form. Use this form to report nonpayroll income tax

tax on nonpayroll payments as follows: $2,000 on January 10;

withholding on Form 945, Annual Return of Withheld Federal

$99,000 on January 24. The deposit rules require that a monthly

Income Tax, based on the dates the amounts were withheld.

schedule depositor begin depositing on a semiweekly deposit

schedule when a $100,000 or more tax liability is accumulated

These nonpayroll items include backup withholding and

on any day within a month (see section 11 of Circular E (Pub.

withholding on pensions, annuities, IRAs, Indian gaming profits,

15) for details). Since Elm Co. accumulated $101,000 ($2,000 +

gambling winnings, and military retirement. Also use Form 945-A

$99,000) on January 24, 2003, it became a semiweekly schedule

to report tax liabilities reported on Form CT-1, Employer’s

depositor. Elm Co. must complete Form 945-A and file it with

Annual Railroad Retirement Tax Return.

Form 945. It must record $2,000 on line 10 and $99,000 on line

Note: Form 945-A is a summary of your tax liability, not a

24 for January. No entries should be made on line 8 of Form

summary of deposits made. (The IRS gets deposit data from FTD

945 although Elm Co. was a monthly schedule depositor until

coupons or EFTPS.)

January 24.

Who must file. Semiweekly schedule depositors are required to

Adjustments. Semiweekly schedule depositors must report

complete and file Form 945-A with Form 945 or CT-1. Do not

adjustments on Form 945-A to correct administrative errors on

complete this form if you are a monthly schedule depositor,

prior Forms 945 and errors on prior Forms CT-1. (Reminder:

unless you accumulate a tax liability of $100,000 during any

You will not be allowed a refund or credit for any prior year

month of the year. Monthly schedule depositors who accumulate

overpayment of income tax that you withheld or deducted from

$100,000 become semiweekly schedule depositors for the

a payee.) For information on correcting administrative errors, see

remainder of the year and must complete Form 945-A for the

the Instructions for Form 945, the Instructions for Form CT-1,

entire year. The deposit rules, including the $100,000 next-day

and section 13 of Circular E (Pub. 15). (The Circular E (Pub. 15)

deposit rule, are explained in section 11 of Circular E (Pub. 15),

instructions for making adjustments refer to Form 941, but they

Employer’s Tax Guide, the Instructions for Form 945, and the

also apply to Form 945 adjustments.) If the adjustment increases

Instructions for Form CT-1.

your current liability, report the adjustment on the entry space

Important. Form 945-A is used by the IRS to match your tax

corresponding to the date the error was discovered.

liability reported on this form with your deposits and to

If the adjustment decreases your current liability, use the

determine if you have deposited your withholding tax liabilities

adjustment amount as a credit to offset subsequent liabilities on

on time. Unless Form 945-A is properly completed and filed with

Form 945-A until it is used up. For example, on January 8, 2003,

Form 945 or CT-1, the IRS will not be able to process your

Oak Rail Co. discovered that a mathematical error was made on

return and will have to contact you for the missing information.

a prior year return, resulting in a $10,000 overstatement of

nonpayroll income tax withholding. Since the correct amounts

Specific Instructions

were withheld and reported on Forms 1099-R, this is an

administrative error that can be corrected on Form 945. Oak Rail

If you are required to report your tax liabilities on Form 945-A as

Co. made payments subject to nonpayroll income tax

discussed above, file it with Form 945 or CT-1. Do not complete

withholding on January 3, 10, 17, 24, and 31 and had a $5,000

entries A through M of the Monthly Summary of Federal Tax

tax liability for each of those pay dates. On Form 945-A, it must

Liability (line 8 on Form 945) or the Monthly Summary of Railroad

report $5,000 on line 3 for January. The adjustment for the

Retirement Tax Liability (page 2 of Form CT-1). However, be sure

$10,000 overstatement is used to offset the January 10 and 17

to mark the semiweekly schedule depositor checkbox above line

liabilities, so these two $5,000 liabilities are not deposited or

8 of Form 945.

reported on Form 945-A. The $5,000 liabilities for January 24

Each numbered space on Form 945-A corresponds to dates

and 31 must be reported on lines 24 and 31 for January.

during the year. Report your tax liabilities corresponding to the

dates payments were made, not when the liabilities accrued. For

Paperwork Reduction Act Notice. We ask for the information

example, if you became liable for a pension distribution on

on this form to carry out the Internal Revenue laws of the United

December 31, 2002, but did not make the distribution until

States. You are required to give us the information. We need it

January 3, 2003, the income tax withholding liability for the

to ensure that you are complying with these laws and to allow

distribution must be reported on Form 945-A for 2003, on line 3

us to figure and collect the right amount of tax.

for January.

You are not required to provide the information requested on a

Example 1. Cedar Co., which has a semiweekly deposit

form that is subject to the Paperwork Reduction Act unless the

schedule, makes periodic payments on gambling winnings on

form displays a valid OMB control number. Books or records

the 15th day of each month. On December 24, 2003, in addition

relating to a form or its instructions must be retained as long as

to its periodic payments, it withheld from a payment on

their contents may become material in the administration of any

gambling winnings under the backup withholding rules. Since

Internal Revenue law. Generally, tax returns and return

Cedar Co. is a semiweekly schedule depositor, it must record

information are confidential, as required by Code section 6103.

these nonpayroll withholding liabilities on Form 945-A. It must

The time needed to complete and file this form will vary

report tax liabilities on line 15 for each month and line 24 for

depending on individual circumstances. The estimated average

December. Cedar Co. enters the monthly totals on lines A

time is:

through L. It adds these monthly subtotals and enters the total

Recordkeeping

6 hr., 27 min.

tax liability for the year on line M. The amount on line M should

equal line 4 of Form 945.

Learning

6 min.

Example 2. Fir Co. is a semiweekly schedule depositor. During

Preparing and sending

January, it withheld income tax on pension distributions as

the form to the IRS

12 min.

follows: $52,000 on January 10; $35,000 on January 24. Since

If you have comments concerning the accuracy of these time

Fir Co. is a semiweekly schedule depositor, it must record its

estimates or suggestions for making this form simpler, we would

income tax withholding liabilities on Form 945-A. It must record

be happy to hear from you. You can write to the IRS at the

$52,000 on line 10 and $35,000 on line 24 for January.

address listed in the Instructions for Form 945.

Form 945-A - Annual Record Of Federal Tax Liability Page 3

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