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

If amounts that must be withheld are not withheld

If you are a monthly schedule depositor and

or are not deposited or paid to the United States

accumulate a $100,000 liability or more on any

Treasury, the trust fund recovery penalty may

day during a calendar month, your deposit

CAUTION

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

schedule changes on the next day to semiweekly for the

fund tax. This penalty may apply when these unpaid

remainder of the year and for the following year. For

taxes cannot be immediately collected from the employer

more information, see the $100,000 Next-Day Deposit

or business. The trust fund recovery penalty may be

Rule in section 11 of Pub. 15 (Circular E).

imposed on all persons who are determined by the IRS to

have been responsible for collecting, accounting for, and

Specific Instructions

paying over these taxes, and who acted willfully in not

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

consciously, and intentionally. A responsible person acts

State Code

willfully if the person knows that the required actions are

not taking place.

Beginning January 1, 2011, the IRS will use business

days to determine the timeliness of deposits. Business

days are any day that is not a Saturday, Sunday, or legal

Voluntary Income Tax Withholding

holiday in the District of Columbia. Legal holidays in the

States must allow unemployment compensation

District of Columbia for 2011 are listed below.

•

recipients to elect to have federal income tax withheld at

January 17— Birthday of Martin Luther King, Jr.

a 10% rate in 2012. Recipients paid under the Railroad

•

February 21— Washington’s Birthday

Unemployment Insurance Act may also elect withholding

•

April 15— District of Columbia Emancipation Day

at a 10% rate in 2012.

•

May 30— Memorial Day

•

July 4— Independence Day

Recipients of any of the following federal payments

•

September 5— Labor Day

may request federal income tax withholding in 2012 at a

•

October 10— Columbus Day

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

•

November 11— Veterans’ Day

•

Social security and Tier 1 railroad retirement benefits,

•

November 24— Thanksgiving Day

•

Certain crop disaster payments, and

December 26— Christmas Day (observed)

•

Commodity Credit Corporation loans.

To provide transitional relief for 2011, the IRS will not

assert penalties for federal tax deposits due during

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

calendar year 2011 that are untimely solely because the

Voluntary Withholding Request, or you may develop your

depositor treated a statewide legal holiday as if it were a

own substitute form. Any voluntary withholding on these

legal holiday in the District of Columbia. See Notice

payments must be reported on Form 945 (and on the

2010-87, 2010-52 I.R.B. 908, available at

required information return—Form 1099-G, Form

irb/2010-52_IRB/ar12.html.

SSA-1099, or Form RRB-1099) and is subject to the

If you made your deposits by electronic funds transfers

deposit rules.

in a state other than that shown in your address on Form

945, enter the state code for the state where you initiated

Depositing Withheld Taxes

the electronic funds transfers in the box provided in the

Deposit all nonpayroll (Form 945) withheld federal

upper-left corner of Form 945. Use the two-letter U.S.

income tax, including backup withholding, by electronic

Postal Service state abbreviation as the state code. Enter

funds transfer. Combine all Form 945 taxes for deposit

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

purposes. Do not combine deposits for Forms 941, 943,

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

944, or Form CT-1 with deposits for Form 945.

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

If you receive a notice because you treated a statewide

Generally, the deposit rules that apply to Form 941

legal holiday as if it were a legal holiday in the District of

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

Columbia, respond to the notice citing the statewide legal

an annual return, the rules for determining your deposit

holiday and applicable deposit amount.

schedule (discussed below) are different from those for

Legal holidays in the District of Columbia are

Form 941. See section 11 of Pub. 15 (Circular E) for a

provided in Pub. 509, Tax Calendars, and Pub. 15

detailed discussion of the deposit rules.

TIP

(Circular E).

Determining Your Deposit Schedule

Line A. Final Return

There are two deposit schedules—monthly or

If you go out of business or end operations and you will

semiweekly — for determining when you must deposit

not have to file Form 945 in the future, file a final return.

withheld federal income tax. These schedules tell you

Be sure to check the box on line A and enter the date

when a deposit is due after a tax liability arises (that is,

that final nonpayroll payments were made.

you make a payment subject to federal income tax

withholding, including backup withholding). Before the

Line 1. Federal Income Tax Withheld

beginning of each calendar year, you must determine

Enter the federal income tax that you withheld (or were

which of the two deposit schedules you must use.

required to withhold) from pensions (including

For 2012, you are a monthly schedule depositor for

distributions from tax-favored retirement plans, for

Form 945 if the total tax reported on your 2010 Form 945

example, section 401(k), section 403(b), and

(line 3) was $50,000 or less. If the total tax reported for

governmental section 457(b) plans), annuities, IRA

2010 exceeded $50,000, you are a semiweekly schedule

distributions, military retirement, Indian gaming profits,

depositor.

and gambling winnings (regular gambling withholding

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Instructions for Form 945 (2011)

Instructions For Form 945 - Annual Return Of Withheld Federal Income Tax - 2011 Page 3

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