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

When to file. For 2004, file Form 945 by January 31,

Depositing Withheld Taxes

2005. However, if you made deposits on time in full

payment of the taxes for the year, you may file the return

Deposit all nonpayroll (Form 945) withheld federal

by February 10, 2005. Your return will be considered

income tax, including backup withholding, using

timely filed if it is properly addressed and mailed

Form 8109, Federal Tax Deposit Coupon, at an

First-Class or sent by an IRS-designated private delivery

authorized financial institution, unless you are required to

service on or before the due date. See Publication 15

use the EFTPS electronic deposit system (see below).

(Circular E) for more information on IRS-designated

Combine all Form 945 taxes for deposit purposes. Do

private delivery services.

not combine deposits for Forms 941, 943, or CT-1 with

deposits for Form 945. If you deposit using Form 8109,

Employer identification number (EIN). If you do not

be sure to darken the space for Form “945” on

have an EIN, apply for one on Form SS-4, Application for

Employer Identification Number. Get this form by calling

Form 8109.

1-800-TAX-FORM (1-800-829-3676) or from the IRS

Generally, the deposit rules that apply to Form 941

website at If you do not have an

also apply to Form 945. However, because Form 945 is

EIN by the time your return is due, write “Applied For”

an annual return, the rules for determining your deposit

and the date you applied in the space shown for the

schedule (discussed below) are different from those for

number.

Form 941. See section 11 of Publication 15 (Circular E)

for a detailed discussion of the deposit rules.

Note. If you are reporting withholding on pension

distributions, be sure to be consistent in using the same

Determining your deposit schedule. There are two

name and EIN for all reporting and depositing of taxes

deposit schedules —monthly or semiweekly —for

(for example, on Forms 945, 1099-R, and 8109/EFTPS).

determining when you must deposit withheld federal

Filing Form 945 with an incorrect name and EIN or failure

income tax. These schedules tell you when a deposit is

to use the same name and EIN in all reporting and

due after a tax liability arises (that is, you make a

depositing of taxes may result in penalties and delays in

payment subject to federal income tax withholding,

processing your return.

including backup withholding). Before the beginning of

each calendar year, you must determine which of the two

Penalties and interest. There are penalties for filing

deposit schedules you must use.

Form 945 late and for paying or depositing taxes late,

unless there is reasonable cause. See section 11 of

For 2005, you are a monthly schedule depositor for

Publication 15 (Circular E) for more information on

Form 945 if the total tax reported on your 2003 Form 945

deposit penalties. There are also penalties for failure to

(line 4) was $50,000 or less. If the total tax reported

furnish information returns (for example, Forms

for 2003 exceeded $50,000, you are a semiweekly

1099-MISC, 1099-R, or W-2G) to payees and failure to

schedule depositor.

file copies with the IRS.

If you are a monthly schedule depositor and

accumulate a $100,000 liability or more on any

If amounts that must be withheld are not withheld

day during a calendar month, your deposit

or are not deposited or paid to the United States

CAUTION

schedule changes to semiweekly for the remainder of the

Treasury, the trust fund recovery penalty may

CAUTION

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

apply. The penalty is the full amount of any unpaid trust

the $100,000 next-day deposit rule in section 11 of

fund tax. This penalty may apply when these unpaid

Publication 15 (Circular E).

taxes cannot be immediately collected from the employer

or business. The trust fund recovery penalty may be

Electronic deposit requirement. You must make

imposed on all persons who are determined by the IRS to

electronic deposits of all depository taxes (such as

have been responsible for collecting, accounting for, and

employment tax, withheld income tax, excise tax, and

paying over these taxes, and who acted willfully in not

corporate income tax) using the Electronic Federal Tax

doing so. “Willfully” in this case means voluntarily,

Payment System (EFTPS) in 2005 if:

•

consciously, and intentionally. A responsible person acts

The total deposits of such taxes in 2003 were more

willfully if the person knows that the required actions are

than $200,000 or

•

not taking place.

You were required to use EFTPS in 2004.

If you are required to use EFTPS and use Form 8109

Voluntary income tax withholding. States must allow

instead, you may be subject to a 10% penalty. If you are

unemployment compensation recipients to elect to

not required to use EFTPS, you may participate

have federal income tax withheld at a 10% rate in 2005.

voluntarily. To enroll in or get more information about

Recipients paid under the Railroad Unemployment

EFTPS, call 1-800-555-4477 or 1-800-945-8400. To

Insurance Act may also elect withholding at a 10% rate

enroll online, visit

in 2005.

Recipients of any of the following federal payments

may request federal income tax withholding in 2005 at a

Specific Instructions

rate of 7%, 10%, 15%, or 25% on:

•

Social security and Tier 1 railroad retirement benefits,

State code. If you made your deposits using Form 8109

•

Certain crop disaster payments, and

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

•

Commodity Credit Corporation loans.

that shown in your address on Form 945, enter the state

The payee may request withholding on Form W-4V,

code for the state where you made deposits or initiated

Voluntary Withholding Request, or you may develop your

EFTPS transfers in the box provided in the upper left

own substitute form. Any voluntary withholding on these

corner of Form 945. Use the Postal Service two-letter

payments must be reported on Form 945 (and on Form

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

1099-G) and is subject to the deposit rules.

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

-2-

Instructions For Form 945 - Annual Return Of Withheld Federal Income Tax - 2004 Page 2

Related Articles

Related forms

Related Categories