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

Depositing Withheld Taxes

If you have no legal residence or principal place of

Deposit all nonpayroll (Form 945) income tax withholding,

business in any state

including backup withholding, using Form 8109, Federal

Tax Deposit Coupon, at an authorized financial

Return without payment:

Return with payment:

institution, unless you are required to use the EFTPS

P.O. Box 80108

electronic deposit system (see below). Combine all Form

Philadelphia, PA 19255-0042

Cincinnati 45280-0008

945 taxes for deposit purposes. Do not combine deposits

for Form 941, 943, or CT-1 with deposits for Form 945. If

Employer identification number (EIN). If you do not

you deposit using Form 8109, be sure to mark the

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

checkbox for Form 945 on Form 8109.

Employer Identification Number. Get this form by calling

Generally, the deposit rules that apply to Form 941

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

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

Web Site at If you do not have an EIN by

an annual return, the rules for determining your deposit

the time the return is due, write “Applied for” and the date

schedule (discussed below) are different from those for

you applied in the space shown for the number.

Form 941. See section 11 of Circular E for a detailed

Note: If you are reporting withholding on pension

discussion of the deposit rules.

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

(e.g., on Forms 945, 1099-R, and 8109/EFTPS). Filing

determining when you must deposit withheld income tax.

Form 945 with an incorrect name and EIN or failure to

These schedules tell you when a deposit is due after a

use the same name and EIN in all reporting and

tax liability arises (i.e., you make a payment subject to

depositing of taxes may result in penalties and delays in

income tax withholding, including backup withholding).

processing your return.

Before the beginning of each calendar year, you must

Penalties and interest. There are penalties for filing

determine which of the two deposit schedules you must

Form 945 late and paying or depositing taxes late, unless

use.

there is reasonable cause. See section 11 of Circular E

For 2002, you are a monthly schedule depositor for

for more information on deposit penalties. There are also

Form 945 if the total tax reported on your 2000 Form 945

penalties for failure to furnish information returns (e.g.,

was $50,000 or less. If the total tax reported for 2000

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

exceeded $50,000, you are a semiweekly schedule

failure to file copies with the IRS.

depositor.

There are penalties for willful failure to (1) file returns

If you are a monthly schedule depositor and

and pay taxes when due or (2) deposit taxes when

accumulate a $100,000 liability or more on any

required. There are also penalties for filing a false return

day during a calendar month, your deposit

CAUTION

or submitting bad checks. Interest is charged on taxes

schedule changes to semiweekly for the remainder of the

paid late at the rate set by law. See Circular E for details.

year and for the following year. See section 11 of Circular

If amounts that must be withheld are not withheld

E for more information on the $100,000 next-day deposit

or are not deposited or paid to the United States

rule.

Treasury, the trust fund recovery penalty may

CAUTION

Electronic deposit requirement. You must make

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

electronic deposits of all depository taxes (such as

fund tax. This penalty may apply when these unpaid

employment tax, excise tax, and corporate income tax)

taxes cannot be immediately collected from the employer

using the Electronic Federal Tax Payment System

or business. The trust fund recovery penalty may be

(EFTPS) in 2002 if:

imposed on all persons who are determined by the IRS to

•

The total deposits of such taxes in 2000 were more

have been responsible for collecting, accounting for, and

than $200,000 or

paying over these taxes, and who acted willfully in not

•

You were required to use EFTPS in 2001.

doing so. Willfully in this case means voluntarily,

If you are required to use EFTPS and fail to do so, you

consciously, and intentionally. A responsible person acts

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

willfully if the person knows the required actions are not

to use EFTPS, you may participate voluntarily. To enroll

taking place.

in or get more information about EFTPS, call

Voluntary income tax withholding. States must allow

1-800-555-4477 or 1-800-945-8400.

unemployment compensation recipients to elect to

have Federal income tax withheld at a 10% rate in 2002.

Recipients paid under the Railroad Unemployment

Specific Instructions

Insurance Act may also elect withholding at a 10% rate in

2002.

State code. If you made your deposits by FTD coupon

Recipients of any of the following Federal payments

or by using EFTPS in a state other than that shown in

may request Federal income tax withholding in 2002 at a

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

rate of 7%, 10%, 15%, or 27%:

state where you made deposits in the box provided in the

•

Social security and Tier 1 railroad retirement benefits

upper left corner of the form. Use the Postal Service

•

Certain crop disaster payments

two-letter state abbreviation as the state code. Enter the

•

Commodity Credit Corporation loans

code “MU” in the state code box if you deposit in more

than one state. If you deposit in the same state as shown

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

in your address, do not make an entry in this box.

Voluntary Withholding Request, or you may develop your

own form. Any voluntary withholding on these payments

Final return. If you go out of business or end operations

must be reported on Form 945 (and on Form 1099–G)

and you will not be required to file Form 945 in the future,

and is subject to the deposit rules.

file a final return. Be sure to mark the final return

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Instructions For Form 945 - Annual Return Of Withheld Federal Income Tax - 2001 Page 2

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