Instructions For Form 945 - Annual Return Of Withheld Federal Income Tax

the year and for the following year. For more information,

error. The administrative error adjustment corrects the

see the $100,000 Next-Day Deposit Rule in section 11 of

amount reported on Form 945 to agree with the amount

Pub. 15 (Circular E).

actually withheld from nonpayroll payments.

Electronic deposit requirement. You must make

You must report an adjustment to correct an

electronic deposits of all depository taxes (such as

administrative error on Form 945 in the year in which you

employment tax, withheld income tax, excise tax, and

discover the error. Indicate negative adjustments with a

corporate income tax) using EFTPS in 2008 if:

minus sign (if possible). Otherwise, use parentheses.

•

The total deposits of such taxes in 2006 were more than

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

$200,000 or

•

year’s overpayment of federal income tax that you withheld

You were required to use EFTPS in 2007.

from a payee. This is because the payees use the amount of

If you are required to use EFTPS and use Form 8109

withholding shown on the information return (for example,

instead, you may be subject to a 10% penalty. If you are not

Form 1099-R) as a credit when filing their income tax

required to use EFTPS, you may participate voluntarily. To

returns.

get more information or to enroll in EFTPS, visit the EFTPS

website at or call 1-800-555-4477.

If you are making an adjustment to correct a prior year

administrative error, report the net adjustment (including an

adjustment to federal income tax withholding and backup

withholding) on line 3. Complete Form 941c, Supporting

Specific Instructions

Statement To Correct Information, or an equivalent

statement, and file it with Form 945 to provide the required

State code. If you made your deposits using Form 8109 or

information on the adjustment. Be sure to identify the

by using an EFTPS bank account in a state other than that

adjustment in the Explanation of Adjustments section of

shown in your address on Form 945, enter the state code for

Form 941c as correcting an administrative error and provide

the state where you made deposits or initiated EFTPS

a description of the error(s). Do not file Form 941c

transfers in the box provided in the upper left corner of

separately from Form 945.

Form 945. Use the two-letter United States Postal Service

state abbreviation as the state code. Enter the code “MU” in

Reporting the adjustment on line 8 or on Form 945-A.

the state code box if you deposit in more than one state. If

The amount of the adjustment also must be taken into

you deposit in the same state as shown in your address, do

account in the Monthly Summary of Federal Tax Liability

not make an entry in this box.

(line 8) or on Form 945-A, Annual Record of Federal Tax

Liability. If the adjustment increases your tax liability, include

Line A — Final return. If you go out of business or end

the adjustment with any other amount on the entry space for

operations and you will not be required to file Form 945 in

the date that you discovered the error and increase any

the future, file a final return. Be sure to check the box in

required deposit by the adjustment amount. If the

line A and enter the date that final nonpayroll payments

adjustment decreases your tax liability, use the adjustment

were made.

amount as a credit to offset subsequent liabilities on line 8 or

Line 1 — Federal income tax withheld. Enter the federal

Form 945-A until it is used up. For more information, see

income tax that you withheld (or were required to withhold)

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

from pensions (including distributions from governmental

instructions for making adjustments refer to Form 941 but

section 457(b) plans), annuities, IRA distributions, military

also apply to Form 945 adjustments.

retirement, Indian gaming profits, and gambling winnings

If you are not required to complete line 8 or

(regular gambling withholding only). Also enter any voluntary

TIP

Form 945-A because your total taxes are less than

amount that you withheld on certain government payments.

$2,500, do not show the adjustment on line 8 or on

If you are required to report federal income tax withholding

Form 945-A.

on Forms 1099 (for example, Form 1099-R or Form W-2G),

you must report the federal income tax withheld on

Line 4 — Total taxes. Add lines 1 and 2 and add or

Form 945.

subtract any net adjustment on line 3. If total taxes are

$2,500 or more, the amount reported on line 4 must equal

Note. Federal income tax withholding reported on

the total liability for the year reported on line 8M of the

Form W-2 must be reported on Form 941, Form 943,

Monthly Summary of Federal Tax Liability, or line M of

Form 944, or Schedule H (Form 1040), as appropriate.

Form 945-A.

Line 2 — Backup withholding. Enter any backup

Line 5 — Total deposits. Enter your total Form 945

withholding, including backup withholding on gambling

deposits for the year, including any overpayment applied

winnings.

from your 2006 return.

Regulated investment companies (RICs) and real estate

Line 6 — Balance due. You do not have to pay if line 6 is

investment trusts (REITs) must report any backup

under $1. Generally, you should have a balance due only if

withholding on Form 945 in the year that the dividends are

your total taxes for the year (line 4) are less than $2,500. If

actually paid. This includes January payments of dividends

you made payments under the accuracy of deposits rule,

declared during October, November, and December of the

see section 11 of Pub. 15 (Circular E). Enter your EIN,

prior year. See the Instructions for Form 1099-DIV for

“Form 945,” and “2007” on your check or money order and

special reporting requirements.

make it payable to the “United States Treasury.” If line 4 is

Line 3 — Adjustment to correct administrative errors.

$2,500 or more and you deposited all taxes when due, the

You cannot make an adjustment on Form 945 to correct

amount on line 6 should be zero. Complete Form 945-V,

federal income tax withholding or backup withholding

Payment Voucher, if you are making a payment with

reported in a prior calendar year unless it is to correct an

Form 945.

administrative error. An administrative error occurs if the

amount you entered on Form 945 is not the amount that you

If you fail to make required deposits (using EFTPS or

actually withheld. For example, if the total federal income tax

Form 8109, as required) and instead pay these

actually withheld was incorrectly reported on Form 945 due

amounts with your return, you may be subject to a

CAUTION

to a math or transposition error, this is an administrative

penalty.

-3-

Instructions For Form 945 - Annual Return Of Withheld Federal Income Tax - 2007 Page 3

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