Form 945 and 945V: Annual Return of Withheld Federal Income Tax/Voucher;

2010

Instructions for Form 945

Department of the Treasury
Internal Revenue Service

Annual Return of Withheld Federal Income Tax
Section references are to the Internal Revenue Code unless
otherwise noted.

What’s New
Electronic deposit requirement. The IRS has issued
proposed regulations under section 6302 which provide that
beginning January 1, 2011, you must deposit all depository
taxes (such as employment tax, excise tax, and corporate
income tax) electronically using the Electronic Federal Tax
Payment System (EFTPS). Under these proposed
regulations, which are expected to be finalized by December
31, 2010, Forms 8109 and 8109-B, Federal Tax Deposit
Coupon, cannot be used after December 31, 2010. For
more information about EFTPS or to enroll in EFTPS, visit
the EFTPS website at www.eftps.gov, or call
1-800-555-4477. You can also get Pub. 966, The Secure
Way to Pay Your Federal Taxes.
Voluntary income tax withholding rates for 2011. The
10%, 15%, and 25% voluntary income tax withholding rates
that applied in 2010 increase to 15%, 28%, and 31%,
respectively, for payments made in 2011. However, at the
time these instructions were prepared for printing, an
extension of the previous rates was being discussed in
Congress. To find out if additional legislation was enacted to
extend the previous rates, monitor the news media or go to
IRS.gov, click on Forms and Publications, and then click on
Changes to Current Tax Products.

Reminders
Additional information. Pub. 15 (Circular E), Employer’s
Tax Guide, explains the rules for withholding, depositing,
and reporting federal income tax. Pub. 15-A, Employer’s
Supplemental Tax Guide, includes information on federal
income tax withholding from pensions, annuities, and Indian
gaming profits. For information on withholding from
gambling winnings, see the Instructions for Forms W-2G
and 5754.
For a list of employment tax products, visit the IRS
website at www.irs.gov/businesses and select “Employment
Taxes” under the Businesses Topics heading.
How to get forms and publications. You can get most
IRS forms and publications by accessing the IRS website at
IRS.gov or by calling the IRS at 1-800-TAX-FORM
(1-800-829-3676).
Employment tax adjustment process. If you discover an
error on a previously filed Form 945, make the correction
using Form 945-X, Adjusted Annual Return of Withheld
Federal Income Tax or Claim for Refund. Form 945-X is a
stand-alone form, meaning taxpayers can file Form 945-X
when an error is discovered. For more information, get the
Instructions for Form 945-X or visit the IRS website at
IRS.gov and type Correcting Employment Taxes in the
search box.
Telephone help. You can call the IRS Business and
Specialty Tax Line toll free at 1-800-829-4933 for answers to
your questions about completing Form 945, tax deposit
rules, or obtaining an employer identification number (EIN).

Credit or debit card payments. Payers can pay the
balance due shown on Form 945 by credit or debit card. Do
not use a credit or debit card to make federal tax deposits.
For more information on paying your taxes with a credit or
debit card, visit the IRS website at www.irs.gov/epay.

Photographs of Missing Children
The Internal Revenue Service is a proud partner with the
National Center for Missing and Exploited Children.
Photographs of missing children selected by the Center may
appear in instructions on pages that would otherwise be
blank. You can help bring these children home by looking at
the photographs and calling 1-800-THE-LOST
(1-800-843-5678) if you recognize a child.

General Instructions
Purpose of form. Use Form 945 to report withheld federal
income tax from nonpayroll payments. Nonpayroll payments
include:

• Pensions (including section 403(b) and governmental
section 457(b) plan distributions), annuities, and IRA
distributions;
• Military retirement;
• Gambling winnings;
• Indian gaming profits;
• Voluntary withholding on certain government
payments; and
• Backup withholding.

Report all federal income tax withholding from nonpayroll
payments or distributions annually on one Form 945. Do not
file more than one Form 945 for any calendar year.
All federal income tax withholding reported on
Forms 1099 (for example, Form 1099-R or 1099-MISC) or
Form W-2G must be reported on Form 945. Do not report
federal income tax withholding from wages on Form 945.
All employment taxes and federal income tax withholding
reported on Form W-2, Wage and Tax Statement, must be
reported on Form 941 or Form 944, Form 943 for
agricultural employees, Schedule H (Form 1040) for
household employees, or Form CT-1 for railroad employees.
Do not report on Form 945 federal income tax withheld
on distributions to participants from nonqualified pension
plans (including nongovernmental section 457(b) plans)
and some other deferred compensation arrangements that
are treated as wages and are reported on Form W-2. Report
such withholding on Form 941 or Form 944. See Pub. 15
(Circular E) for more information.
Who must file. If you withhold federal income tax
(including backup withholding) from nonpayroll payments,
you must file Form 945. See Purpose of form above. You do
not have to file Form 945 for those years in which you do not
have a nonpayroll tax liability. Do not report on Form 945
withholding that is required to be reported on Form 1042,
Annual Withholding Tax Return for U.S. Source Income of
Foreign Persons.

Cat. No. 20534D

Where to file. In the list below, find the location of your
legal residence, principal place of business, office, or
agency. Send Form 945 to the address listed for your
location.
TIP

tax. This penalty may apply when these unpaid taxes cannot
be immediately collected from the employer or business.
The trust fund recovery penalty may be imposed on all
persons who are determined by the IRS to have been
responsible for collecting, accounting for, and 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 willfully if the person
knows that the required actions are not taking place.

Where you file depends on whether or not you are
including a payment with the return.
Without a
payment . . .

If you are in . . .

With a payment . . .

Connecticut
Delaware
District of
Columbia
Georgia
Illinois
Indiana
Kentucky
Maine
Maryland
Massachusetts
Michigan
New Hampshire

New Jersey
New York
North Carolina
Ohio
Pennsylvania
Rhode Island
South Carolina
Tennessee
Vermont
Virginia
West Virginia
Wisconsin

Department of the
Treasury
Internal Revenue
Service
Cincinnati, OH
45999-0042

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Florida
Hawaii
Idaho
Iowa
Kansas
Louisiana
Minnesota
Mississippi

Missouri
Montana
Nebraska
Nevada
New Mexico
North Dakota
Oklahoma
Oregon
South Dakota
Texas
Utah
Washington
Wyoming

Department of the
Treasury
Internal Revenue
Service
Ogden, UT
84201-0042

Internal Revenue
Service
P.O. Box 105153
Atlanta, GA
30348-5153

No legal residence or principal
place of business in any state:

Internal Revenue
Service
P.O. Box 409101
Ogden, UT
84409

Internal Revenue
Service
P.O. Box 105288
Atlanta, GA
30348-5288

If you are filing Form 945 for an
exempt organization or
government entity (federal, state,
local, or Indian tribal
government), use the following
addresses, regardless of your
location:

Department of the
Treasury
Internal Revenue
Service
Ogden, UT
84201-0042

Internal Revenue
Service
P.O. Box 105153
Atlanta, GA
30348-5153

Voluntary income tax withholding. States must allow
unemployment compensation recipients to elect to have
federal income tax withheld at a 15% rate in 2011.
Recipients paid under the Railroad Unemployment
Insurance Act may also elect withholding at a 15% rate in
2011.

Internal Revenue
Service
P. O. Box 804524
Cincinnati, OH
45280-4524

Recipients of any of the following federal payments may
request federal income tax withholding in 2011 at a rate of
7%, 15%, 28%, or 31% on:
• Social security and Tier 1 railroad retirement benefits,
• Certain crop disaster payments, and
• Commodity Credit Corporation loans.
The payee may request withholding on Form W-4V,
Voluntary Withholding Request, or you may develop your
own substitute form. Any voluntary withholding on these
payments must be reported on Form 945 (and on the
required information return — Form 1099-G, Form
SSA-1099, or Form RRB-1099) and is subject to the deposit
rules.

Depositing Withheld Taxes
Deposit all nonpayroll (Form 945) withheld federal income
tax, including backup withholding, using EFTPS. Combine
all Form 945 taxes for deposit purposes. Do not combine
deposits for Forms 941, 943, 944, or Form CT-1 with
deposits for Form 945.
Generally, the deposit rules that apply to Form 941 also
apply to Form 945. However, because Form 945 is an
annual return, the rules for determining your deposit
schedule (discussed below) are different from those for
Form 941. See section 11 of Pub. 15 (Circular E) for a
detailed discussion of the deposit rules.

When to file. For 2010, file Form 945 by January 31, 2011.
However, if you made deposits on time in full payment of the
taxes for the year, you may file the return by February 10,
2011. Your return will be considered timely filed if it is
properly addressed and mailed First-Class or sent by an
IRS-designated private delivery service on or before the due
date. See Pub. 15 (Circular E) for more information on
IRS-designated private delivery services.
Employer identification number (EIN). If you do not have
an EIN, you may apply for one online. Go to the IRS website
at IRS.gov and click on Apply for an Employer Identification
Number (EIN) Online. You may also apply for an EIN by
calling 1-800-829-4933, or you can fax or mail Form SS-4,
Application for Employer Identification Number, to the IRS.
Penalties and interest. There are penalties for filing
Form 945 late and for paying or depositing taxes late, unless
there is reasonable cause. See section 11 of Pub. 15
(Circular E) for more information on deposit penalties. There
are also penalties for failure to furnish information returns
(for example, Forms 1099-MISC, 1099-R, or W-2G) to
payees and failure to file copies with the IRS.

Determining your deposit schedule. There are two
deposit schedules — monthly or semiweekly — for
determining when you must deposit withheld federal income
tax. These schedules tell you when a deposit is due after a
tax liability arises (that is, you make a payment subject to
federal income tax withholding, including backup
withholding). Before the beginning of each calendar year,
you must determine which of the two deposit schedules you
must use.
For 2011, you are a monthly schedule depositor for
Form 945 if the total tax reported on your 2009 Form 945
(line 3) was $50,000 or less. If the total tax reported for 2009
exceeded $50,000, you are a semiweekly schedule
depositor.
If you are a monthly schedule depositor and
accumulate a $100,000 liability or more on any day
CAUTION
during a calendar month, your deposit schedule
changes on the next day to semiweekly for the remainder of
the year and for the following year. For more information,
see the $100,000 Next-Day Deposit Rule in section 11 of
Pub. 15 (Circular E).

!

If amounts that must be withheld are not withheld or
are not deposited or paid to the United States
CAUTION
Treasury, the trust fund recovery penalty may
apply. The penalty is the full amount of any unpaid trust fund

!

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Instructions for Form 945 (2010)

Line 6 — Overpayment. If you deposited more than the
correct amount for the year, you can have the overpayment
refunded or applied to your next return by checking the
appropriate box. The IRS may apply your overpayment to
any past due tax account under your EIN. If line 6 is under
$1, we will send a refund or apply it to your next return only
on written request.
Line 7 — Monthly Summary of Federal Tax Liability.

Specific Instructions
State code. If you made your deposits using Form 8109 or
by using an EFTPS bank account in a state other than that
shown in your address on Form 945, enter the state code for
the state where you made deposits or initiated EFTPS
transfers in the box provided in the upper left corner of
Form 945. Use the two-letter United States Postal Service
state abbreviation as the state code. Enter the code “MU” in
the state code box if you deposit in more than one state. If
you deposit in the same state as shown in your address, do
not make an entry in this box.
Line A — Final return. If you go out of business or end
operations and you will not have to file Form 945 in the
future, file a final return. Be sure to check the box on
line A and enter the date that final nonpayroll payments
were made.
Line 1 — Federal income tax withheld. Enter the federal
income tax that you withheld (or were required to withhold)
from pensions (including distributions from section 403(b)
and governmental section 457(b) plans), annuities, IRA
distributions, military retirement, Indian gaming profits, and
gambling winnings (regular gambling withholding only). Also
enter any voluntary amount that you withheld on certain
government payments. If you are required to report federal
income tax withholding on Forms 1099 (for example, Form
1099-R or 1099-MISC) or Form W-2G, you must report the
federal income tax withheld on Form 945.
Note. Federal income tax withholding reported on
Form W-2 must be reported on Form 941, Form 943,
Form 944, or Schedule H (Form 1040), as appropriate.
Line 2 — Backup withholding. Enter any backup
withholding, including backup withholding on gambling
winnings.

!

CAUTION

Complete line 7 only if you were a monthly schedule
depositor for the entire year and line 3 is $2,500 or more.
See Determining your deposit schedule on page 2.

!

The amount entered on line 7M must equal the
amount reported on line 3.

CAUTION

Report your liabilities on Form 945-A instead of on
line 7 if either of the following apply.
• You were a semiweekly schedule depositor
during 2010. Do not complete entries A through M of
line 7. Instead, complete and file Form 945-A with
Form 945.
• You were a monthly schedule depositor for 2010 and
during any month you accumulated nonpayroll taxes of
$100,000 or more. Because this converted you to a
semiweekly schedule depositor for the remainder of 2010
(and for 2011), you must report your liabilities on
Form 945-A for the entire year. Do not complete entries A
through M of line 7. For more information, see the $100,000
Next-Day Deposit Rule in section 11 of Pub. 15 (Circular E).
Third-Party Designee. If you want to allow any individual,
corporation, firm, organization, or partnership to discuss
your 2010 Form 945 with the IRS, check the “Yes” box in the
Third-Party Designee section of Form 945. Also, enter the
name, phone number, and any five-digit personal
identification number (PIN) for the specific person to speak
with — not the name of the firm who prepared your return.
By checking the “Yes” box, you are authorizing the IRS to
speak with the designee to answer any questions relating to
the information reported on your tax return. You are also
authorizing the designee to:
• Give the IRS any information that is missing from your
return,
• Call the IRS for information about the processing of your
return or the status of your refund or payments,
• Receive copies of notices or transcripts related to your
return upon request, and
• Respond to certain IRS notices about math errors, offsets,
and return preparation.
You are not authorizing the designee to receive any
refund check, bind you to anything (including additional tax
liability), or otherwise represent you before the IRS. If you
want to expand the designee’s authorization, see Pub. 947,
Practice Before the IRS and Power of Attorney.
The authorization will automatically expire 1 year from the
due date (without regard to extensions) for filing your 2010
Form 945. If you or your designee wants to terminate the
authorization, write to the IRS office for your locality using
the address for Where to file (without a payment) in the
chart on page 2.
Who must sign. Form 945 must be signed as follows:
• Sole proprietorship — The individual who owns the
business.
• Corporation (including a limited liability company
(LLC) treated as a corporation) — The president, vice
president, or other principal officer duly authorized to sign.

Regulated investment companies (RICs) and real estate
investment trusts (REITs) must report any backup
withholding on Form 945 in the year that the dividends are
actually paid. This includes January payments of dividends
declared during October, November, and December of the
prior year. See the Instructions for Form 1099-DIV for
special reporting requirements.
Line 3 — Total taxes. Add lines 1 and 2. If total taxes are
$2,500 or more, the amount reported on line 3 must equal
the total liability for the year reported on line 7M of the
Monthly Summary of Federal Tax Liability, or line M of Form
945-A.
Line 4 — Total deposits. Enter your total Form 945
deposits for the year, including any overpayment that you
applied from filing Form 945-X and any overpayment that
you applied from your 2009 return.
Line 5 — Balance due. You do not have to pay if line 5 is
under $1. Generally, you should have a balance due only if
your total taxes for the year (line 3) are less than $2,500. If
you made payments under the accuracy of deposits rule,
see section 11 of Pub. 15 (Circular E). Enter your EIN,
“Form 945,” and “2010” on your check or money order and
make it payable to the “United States Treasury.” Complete
Form 945-V, Payment Voucher, if you are making a
payment with Form 945. If line 3 is $2,500 or more and you
deposited all taxes when due, the amount on line 5 should
be zero.
If you did not make required deposits (using EFTPS
or Form 8109, as required) and instead pay these
CAUTION
amounts with your return, you may be subject to a
penalty.

!

Instructions for Form 945 (2010)

This is a summary of your monthly tax liability, not a
summary of deposits made. If line 3 is less than
$2,500, do not complete line 7 or Form 945-A.

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• Partnership (including an LLC treated as a

Privacy Act and Paperwork Reduction Act Notice. We
ask for the information on Form 945 to carry out the Internal
Revenue laws of the United States. We need it to figure and
collect the right amount of tax. Sections 3402, 3405, and
3406 of the Internal Revenue Code require taxpayers to pay
over to the IRS federal income tax withheld from certain
nonpayroll payments and distributions, including backup
withholding. Form 945 is used to determine the amount of
the taxes that you owe. Section 6011 requires you to
provide the requested information if the tax applies to you.
Section 6109 requires you to provide your identification
number.
You do not have to provide the information requested on
a form that is subject to the Paperwork Reduction Act unless
the form displays a valid OMB control number. Books or
records relating to a form or its instructions must be retained
as long as their contents may become material in the
administration of any Internal Revenue law.
Generally, tax returns and return information are
confidential, as required by section 6103. However, section
6103 allows or requires the Internal Revenue Service to
disclose or give the information shown on your tax return to
others described in the Code. For example, we may disclose
your tax information to the Department of Justice for civil
and criminal litigation, and to cities, states, the District of
Columbia, and U.S. commonwealths and possessions to
administer their tax laws. We may also disclose this
information to other countries under a tax treaty, to federal
and state agencies to enforce federal nontax criminal laws,
or to federal law enforcement and intelligence agencies to
combat terrorism.
The time needed to complete and file Form 945 will vary
depending on individual circumstances. The estimated
average time is: Recordkeeping, 7 hr., 9 min.; Learning
about the law or the form, 47 min.; and Preparing and
sending the form to the IRS, 56 min. If you have
comments concerning the accuracy of these time estimates
or suggestions for making Form 945 simpler, we would be
happy to hear from you. You can write to the Internal
Revenue Service, Tax Products Coordinating Committee,
SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW,
IR-6526, Washington, DC 20224. Do not send Form 945 to
this address. Instead, see Where to file on page 2.

partnership) or unincorporated organization — A
responsible and duly authorized member or officer having
knowledge of its affairs.
• Single member LLC treated as a disregarded entity —
The owner of the limited liability company (LLC).
• Trust or estate — The fiduciary.
Form 945 may also be signed by a duly authorized agent
of the taxpayer if a valid power of attorney has been filed.
Alternative signature method. Corporate officers or duly
authorized agents may sign Form 945 by rubber stamp,
mechanical device, or computer software program. For
details and required documentation, see Rev. Proc.
2005-39, 2005-28 I.R.B. 82, available at
www.irs.gov/irb/2005-28_IRB/ar16.html.
Paid preparers. A paid preparer must sign Form 945 and
provide the information in the “Paid Preparer’s Use Only ”
section if the preparer was paid to prepare Form 945 and is
not an employee of the filing entity. Paid preparers must
sign paper returns with a manual signature. The preparer
must give you a copy of the return in addition to the copy to
be filed with the IRS.
If you are a paid preparer, enter your Preparer Tax
Identification Number (PTIN) in the space provided. Include
your complete address. If you work for a firm, enter the
firm’s name and the EIN of the firm. You can apply for a
PTIN online or by filing Form W-12, IRS Paid Preparer Tax
Identification Number (PTIN) Application. For more
information about applying for a PTIN online, visit the IRS
website at www.irs.gov/taxpros. You cannot use your PTIN
in place of the EIN of the tax preparation firm.
Generally, do not complete this section if you are filing
the return as a reporting agent and have a valid Form 8655,
Reporting Agent Authorization, on file with the IRS.
However, a reporting agent must complete this section if the
reporting agent offered legal advice, for example, advising
the client on determining whether federal income tax
withholding is required on certain payments.

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Instructions for Form 945 (2010)