Instructions for Completing the 2022 Form 945

Form 945, the Annual Return of Withheld Federal Income Tax, is a specialized information return used by payers to report federal income tax withheld from nonpayroll payments. The form’s primary function is to reconcile the amount of tax withheld from payments like pensions or certain gambling winnings with the deposits made to the Internal Revenue Service (IRS) throughout the year. This process ensures that all withheld taxes are properly accounted for and remitted to the government. The annual filing provides a comprehensive overview for the IRS, summarizing a full year’s worth of nonpayroll withholding activity on a single return.

Determining Your Filing Requirement

A filing requirement for Form 945 is triggered when a payer withholds, or is required to withhold, federal income tax from specific nonpayroll payments. If you have made such payments and withheld tax, you are obligated to file this return. The requirement is based on the act of withholding, not the amount of tax withheld. You do not need to file Form 945 for years in which you had no nonpayroll tax liability.

The types of payments that fall under this mandate are distinct from regular wages and include:

• Distributions from pensions, annuities, and retirement plans like 401(k)s and IRAs
• Payments to military retirees
• Distributions of Indian gaming profits to tribal members
• Certain kinds of gambling winnings reported on Form W-2G
• Payments subject to backup withholding if a recipient fails to provide a correct taxpayer identification number

Voluntary withholding agreements also create a filing obligation. This occurs when a recipient of certain government payments, like Social Security benefits, or dividends from an Alaska Native Corporation requests to have federal income tax withheld. For any of these specified payments, the withheld tax must be reported on Form 945, not on forms used for employee wages like Form 941 or Form 944.

Information and Documents Needed for Filing

To prepare Form 945, you must gather your Employer Identification Number (EIN), legal business name, and address. This information identifies you as the payer to the IRS and links the return to your business account. It is important to use the same name and EIN that the IRS has on file for your business.

You will need complete and accurate financial records for the calendar year. This includes a detailed accounting of the total nonpayroll payments made to all recipients and a precise record of the total federal income tax you withheld from those payments. These figures form the core data for the tax calculation on the return.

You also need records of your federal tax deposits made throughout the year for your Form 945 liabilities. This includes the date and amount of each deposit made through the Electronic Federal Tax Payment System (EFTPS). A consolidated record of these deposits is necessary to calculate any balance due or overpayment.

Completing Form 945

Begin by entering your EIN, name, and address at the top of the form. On Line 1, enter the total federal income tax withheld from all nonpayroll payments made during the year. This includes taxes withheld from pensions, annuities, and other distributions.

On Line 2, enter the total amount of backup withholding you collected. Line 3 is the sum of Line 1 and Line 2, representing your total withheld taxes for the year. This figure must match your total tax liability.

Line 4 requires you to enter the total deposits you made for the tax year, including any overpayment applied from a prior year’s return. If Line 3 is greater than Line 4, you have a balance due, which you enter on Line 5. If Line 4 exceeds Line 3, you have an overpayment, which is reported on Line 6.

If your total tax on Line 3 is less than $2,500, you are not required to complete the monthly summary on Line 7 or file Form 945-A. If your tax liability is $2,500 or more, your deposit schedule determines how you report these liabilities. Monthly depositors complete the “Monthly Summary of Federal Tax Liability” on Line 7, while semiweekly depositors must attach Form 945-A, Annual Record of Federal Tax Liability.

Filing and Depositing Procedures

The deadline to file Form 945 with the IRS is January 31 of the year following the tax year. However, if you made all your tax deposits for the year on time and in full, the filing deadline is extended to February 10. For the 2024 tax year, these deadlines were January 31, 2025, and February 10, 2025, respectively.

The mailing addresses for paper filing vary based on your principal business location and whether a payment is enclosed; these addresses are provided in the official IRS Instructions for Form 945. Alternatively, you can file electronically through an authorized e-file provider, which the IRS recommends for faster processing.

All federal tax deposits for Form 945 must be made using the Electronic Federal Tax Payment System (EFTPS). To make a payment, you log into your EFTPS account and select the appropriate tax form and calendar year for the deposit.

Correcting a Filed Return

If you discover an error on a previously filed Form 945, you must use Form 945-X, Adjusted Annual Return of Withheld Federal Income Tax or Claim for Refund, to make the correction. This form is used to amend a return and cannot be used for original filing.

You would file Form 945-X to correct administrative errors or to report an overpayment or underpayment of taxes. For example, if you realized you had overreported the total amount of tax withheld and deposited too much, you would use Form 945-X to claim a refund. Conversely, if you underreported the tax, you would use the form to report and pay the additional amount due. The IRS supports electronic filing for Form 945-X through its Modernized e-File (MeF) system.