F-945,Annual Return of Withheld Federal Income Tax/Voucher; F-945-A, Annual Record of Federal Tax Liability

Instructions for Form 945-A

Department of the Treasury
Internal Revenue Service

(December 2020)

Annual Record of Federal Tax Liability
Section references are to the Internal Revenue Code
unless otherwise noted.

General Instructions

Future Developments

Purpose of Form 945-A

For the latest information about developments related to
Form 945-A and its instructions, such as legislation
enacted after they were published, go to IRS.gov/
Form945A.

What’s New
Adjusting tax liability for nonrefundable credits
claimed on Form CT-1, lines 16 and 17, or Form 944,
lines 8a, 8b, and 8c. See Adjusting Tax Liability for
Nonrefundable Credits Claimed on Form CT-1, Lines 16
and 17, or Form 944, Lines 8a, 8b, and 8c, later, for
instructions on how to report on Form 945-A adjustments
to your tax liabilities for the qualified small business
payroll tax credit for increasing research activities (Form
944 only), the credit for qualified sick and family leave
wages (compensation), and the employee retention
credit.
Adjusting tax liability for the deferred amount of social security tax (Tier 1 Employer tax and/or Tier 1
Employee tax) that you pay or deposit in 2020. See
Adjusting tax liability for the deferred amount of social
security tax (Tier 1 Employer tax and/or Tier 1 Employee
tax) that you pay or deposit in 2020, later, for instructions
on how to report your tax liabilities on Form 945-A if you
defer social security tax (Tier 1 Employer tax and/or Tier 1
Employee tax) and subsequently pay or deposit that
deferred amount in the same year it was deferred.

Reminders
Reporting prior period adjustments. Prior period
adjustments are reported on Form 945-X, Adjusted
Annual Return of Withheld Federal Income Tax or Claim
for Refund; Form CT-1 X, Adjusted Employer's Annual
Railroad Retirement Tax Return or Claim for Refund; or
Form 944-X, Adjusted Employer's ANNUAL Federal Tax
Return or Claim for Refund, and aren't taken into account
when figuring the tax liability for the current year.
When you file Form 945-A with your Form 945, CT-1, or
944, don't change your current year tax liability by
adjustments reported on any Form 945-X, CT-1 X, or
944-X.
Amended Form 945-A. If you have been assessed a
failure-to-deposit (FTD) penalty, you may be able to file an
amended Form 945-A. See Correcting Previously
Reported Tax Liability, later.

Dec 16, 2020

Use Form 945-A to report your federal tax liability (based
on the dates payments were made or wages were paid)
for the following tax returns.

• Forms 945 and 945-X for federal income tax
withholding on nonpayroll payments. Nonpayroll
withholding includes backup withholding and federal
income tax withholding on pensions, annuities, IRAs,
Indian gaming profits, gambling winnings, military
retirement, certain government payments on which the
recipient elected voluntary income tax withholding, and
dividends and other distributions by an Alaska Native
Corporation on which the recipient elected voluntary
income tax withholding.
• Forms CT-1 and CT-1 X for both employee and
employer share of Tier 1 and Tier 2 taxes.
• Forms 944 and 944-X for federal income tax withheld
plus both employee and employer share of social security
and Medicare taxes.
Don't reduce your liability reported on Form 945-A for
Form 944 by the deferred amount of any employer share
of social security tax reported on Form 944, line 10b, or by
the deferred amount of any employee share of social
security tax reported on Form 944, line 10c. Don't reduce
your liability reported on Form 945-A for Form CT-1 by the
deferred amount of the Tier 1 Employer tax reported on
Form CT-1, line 21, or by the deferred amount of any Tier
1 Employee tax reported on Form CT-1, line 22. See the
Caution under Enter Your Tax Liability by Month, later.
Don't use Form 945-A to show federal tax deposits. The
IRS gets deposit data from electronic funds transfers.

Forms 944(SP) and 944-X (SP)

If you're a semiweekly schedule depositor who files
Formulario 944(SP), Declaración Federal ANUAL de
Impuestos del Patrono o Empleador, you should use
Formulario 943A-PR, Registro de la Obligación
Contributiva Federal del Patrono Agrícola, to report your
tax liability. You should also file Form 943A-PR if you file
Form 944-X (SP) and you need to amend a previously
filed Form 943A-PR.
The IRS uses Form 945-A to match the tax liability
you reported on the returns indicated earlier with
CAUTION your deposits. The IRS also uses Form 945-A to
determine if you have deposited your tax liabilities on
time. Unless Form 945-A is properly completed and filed
(if applicable) with your tax return, the IRS may propose
an “averaged” FTD penalty. See Deposit Penalties in
section 11 of Pub. 15, Employer’s Tax Guide, for more
information.

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Cat. No. 74488U

Who Must File?

tax liability for the year (line M) must equal net taxes on
Form 945, line 3; Form CT-1, line 19 (line 15 for years
before 2020); or Form 944, line 9. Enter the monthly totals
on lines A, B, C, D, E, F, G, H, I, J, K, and L. Enter the total
for the year on line M.
For example, if you're a Form 945 filer, and you
became liable for a pension distribution on December 31,
2019, but didn't make the distribution until January 7,
2020, you would:
• Go to January on Form 945-A filed with your 2020
return, and
• Enter your tax liability on line 7 because line 7
represents the seventh day of the month.
Example 1. Cedar Co., which has a semiweekly
deposit schedule, makes periodic payments on gambling
winnings on the 15th day of each month. On December
24, 2020, in addition to its periodic payments, it withheld
from a payment on gambling winnings under the backup
withholding rules. Since Cedar Co. is a semiweekly
schedule depositor, it must record these nonpayroll
withholding liabilities on Form 945-A. It must report tax
liabilities on line 15 for each month and line 24 for
December.
Cedar Co. enters the monthly totals on lines A through
L. It adds these monthly subtotals and enters the total tax
liability for the year on line M. The amount on line M
should equal Form 945, line 3.
Example 2. Fir Co. is a semiweekly schedule
depositor. During January, it withheld federal income tax
on pension distributions as follows: $52,000 on January
10 and $35,000 on January 24. Since Fir Co. is a
semiweekly schedule depositor, it must record its federal
income tax withholding liabilities on Form 945-A. It must
record $52,000 on line 10 and $35,000 on line 24 for
January.
Example 3. Elm Co. is a new business and monthly
schedule depositor for 2020. During January, it withheld
federal income tax on nonpayroll payments as follows:
$2,000 on January 10 and $99,000 on January 24. The
deposit rules require that a monthly schedule depositor
begin depositing on a semiweekly deposit schedule when
a $100,000 or more tax liability is accumulated on any day
within a month (see section 11 of Pub. 15 for details).
Since Elm Co. accumulated $101,000 ($2,000 + $99,000)
on January 24, 2020, it became a semiweekly schedule
depositor on January 25, 2020. Elm Co. must complete
Form 945-A and file it with Form 945. It must record
$2,000 on line 10 and $99,000 on line 24 for January. No
entries should be made on Form 945, line 7, even though
Elm Co. was a monthly schedule depositor until January
25.

Semiweekly schedule depositors must complete and file
Form 945-A with their tax return. Don't file Form 945-A if
your net tax liability for the return period is less than
$2,500. Don't file this form if you're a monthly schedule
depositor unless you accumulated a tax liability of
$100,000 during any month of the year. Monthly schedule
depositors who accumulate $100,000 or more of tax
liability on any day of a calendar month become
semiweekly schedule depositors on the next day and
remain so for at least the remainder of the year and for the
next year, and must also complete and file Form 945-A for
the entire year. The $100,000 tax liability threshold
requiring a next-day deposit is determined before you
consider any reduction of your liability for nonrefundable
credits. See IRS.gov/ETD for more information.
The deposit rules, including the $100,000 Next-Day
Deposit Rule, are explained in section 11 of Pub. 15 and
in the instructions for your tax return.

When Must You File?

File Form 945-A with your Form 945, CT-1, or 944 every
year when Form 945, CT-1, or 944 is due. See the
instructions for these forms for their due dates.

Specific Instructions
Completing Form 945-A
Enter Your Business Information

Carefully enter your employer identification number (EIN)
and name at the top of the form. Make sure that they
exactly match the name of your business and the EIN that
the IRS assigned to your business and also agree with the
name and EIN shown on the attached Form 945, 945-X,
CT-1, CT-1 X, 944, or 944-X.

Calendar Year

Enter the calendar year of the Form 945, 945-X, CT-1,
CT-1 X, 944, or 944-X to which Form 945-A is attached.

Form 945 Filers

Don't complete entries A through M of the Monthly
Summary of Federal Tax Liability (Form 945, line 7). Be
sure to mark the semiweekly schedule depositor
checkbox above line 7 on Form 945.

Form CT-1 Filers

Don't complete the Monthly Summary of Railroad
Retirement Tax Liability (Part II of Form CT-1).

Form 944 filers. Your total liability for the year
must equal line 9 on Form 944; therefore, don't
CAUTION reduce your total liability reported on Form 945-A
by the deferred amount of the employer or employee
share of social security tax, the refundable portion of the
credit for qualified sick and family leave wages, or the
refundable portion of the employee retention credit. The
deferred amount of the employer share of social security
tax reported on Form 944, line 10b, and the deferred
amount of the employee share of social security tax
reported on Form 944, line 10c, don't reflect deferred

Form 944 Filers

!

On Form 944, check the box for “Line 9 is $2,500 or more”
at line 13, and leave lines 13a through 13m blank.

Enter Your Tax Liability by Month

Each numbered space on Form 945-A corresponds to a
date during the year. Enter your tax liabilities in the spaces
that correspond to the dates you paid wages to your
employees or made nonpayroll payments, not the date
liabilities were accrued or deposits were made. The total
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Instructions for Form 945-A (12-2020)

credit may not be carried back and taken as a credit
against wages paid from preceding quarters that are
reported on the same Form 944 or on Forms 944 for
preceding years. If an amount of payroll tax credit is
unused at the end of the calendar year because it is in
excess of the employer share of social security tax on
wages paid during the applicable quarters in the calendar
year, the remaining payroll tax credit may be carried
forward to the first quarter of the succeeding calendar
year as a payroll tax credit against the employer share of
social security tax on wages paid in that quarter. For more
information about the payroll tax credit, go to IRS.gov/
ResearchPayrollTC.
Example. Rose Co. is an employer with a calendar tax
year that filed its timely income tax return on April 15,
2020. Rose Co. elected to take the qualified small
business payroll tax credit for increasing research
activities on Form 6765. The third quarter of 2020 is the
first quarter that begins after Rose Co. filed the income tax
return making the payroll tax credit election. Therefore,
the payroll tax credit applies against Rose Co.'s share of
social security tax on wages paid to employees in the third
quarter of 2020. Rose Co. is a semiweekly schedule
depositor. Rose Co. completes Form 945-A by reducing
the amount of liability entered for the first payroll payment
in the third quarter of 2020 that includes wages subject to
social security tax by the lesser of (1) its share of social
security tax on the wages, or (2) the available payroll tax
credit. If the payroll tax credit elected is more than Rose
Co.'s share of social security tax on the first payroll
payment of the quarter, the excess payroll tax credit
would be carried forward to succeeding payroll payments
in the third quarter until it is used. If the amount of the
payroll tax credit exceeds Rose Co.'s share of social
security tax on wages paid to its employees in the third
quarter, the excess credit would be treated as a payroll
tax credit against its share of social security tax on wages
paid in the fourth quarter. If the amount of the payroll tax
credit remaining exceeded Rose Co.'s share of social
security tax on wages paid in the fourth quarter, it could be
carried forward and treated as a payroll tax credit for the
first quarter of 2021.

liabilities, but instead postponed due dates for payment.
See the Instructions for Form 944 for more information.
Form CT-1 filers. Your total liability for the year
must equal line 19 on Form CT-1; therefore, don't
CAUTION reduce your total liability reported on Form 945-A
by the deferred amount of the Tier 1 Employer tax and/or
Tier 1 Employee tax, the refundable portion of the credit
for qualified sick and family leave compensation, or the
refundable portion of the employee retention credit. The
deferred amount of the Tier 1 Employer tax reported on
Form CT-1, line 21, and the deferred amount of the Tier 1
Employee tax reported on Form CT-1, line 22, don't reflect
deferred liabilities, but instead postponed due dates for
payment. See the Instructions for Form CT-1 for more
information.

!

Adjusting Tax Liability for Nonrefundable
Credits Claimed on Form CT-1, Lines 16 and 17,
or Form 944, Lines 8a, 8b, and 8c
The credits discussed in this section aren't

TIP available on Form 945. The qualified small

business payroll tax credit for increasing research
activities is available only on Form 944.
Semiweekly schedule depositors must account for
nonrefundable credits claimed on Form CT-1, lines 16 and
17, or Form 944, lines 8a, 8b, and 8c, when reporting their
tax liabilities on Form 945-A. The total tax liability for the
year must equal the amount reported on Form CT-1,
line 19, or Form 944, line 9. Failure to account for the
nonrefundable credits on Form 945-A may cause Form
945-A to report more than the total tax liability reported on
Form CT-1, line 19, or Form 944, line 9. Don't reduce your
daily tax liability reported on Form 945-A below zero.
Qualified small business payroll tax credit for increasing research activities (Form 944, line 8a). The
qualified small business payroll tax credit for increasing
research activities is limited to the employer share of
social security tax on wages paid in the quarter that
begins after the income tax return electing the credit has
been filed. In completing Form 945-A, you take into
account the payroll tax credit against the liability for the
employer share of social security tax starting with the first
payroll payment of the quarter that includes payments of
wages subject to social security tax to your employees.
The credit may be taken to the extent of the employer
share of social security tax on wages associated with the
first payroll payment, and then to the extent of the
employer share of social security tax associated with
succeeding payroll payments in the quarter until the credit
is used. Consistent with the entries on Form 945-A, the
payroll tax credit should be taken into account in making
deposits of employment tax. If any payroll tax credit is
remaining at the end of the quarter that has not been
completely used because it exceeds the employer share
of social security tax for the quarter, the excess credit may
be carried forward to the succeeding quarter and allowed
as a payroll tax credit for the succeeding quarter. The
payroll tax credit may not be taken as a credit against
income tax withholding, Medicare tax, or the employee
share of social security tax. Also, the remaining payroll tax
Instructions for Form 945-A (12-2020)

Nonrefundable portion of credit for qualified sick and
family leave compensation (Form CT-1, line 16).
Follow the instructions under Part II. Record of Railroad
Retirement Tax Liability in the Instructions for Form CT-1
to adjust your tax liability on Form 945-A.
Nonrefundable portion of credit for qualified sick and
family leave wages (Form 944, line 8b). The
nonrefundable portion of the credit for qualified sick and
family leave wages is limited to the employer share of
social security tax on wages paid in the year that is
remaining after that share is first reduced by any credit
claimed on Form 944, line 8a, for the qualified small
business payroll tax credit for increasing research
activities, and/or any credit to be claimed on Form 5884C, line 11, for the work opportunity credit for qualified taxexempt organizations hiring qualified veterans. In
completing Form 945-A, you take into account the
nonrefundable portion of the credit for qualified sick and
family leave wages (including the qualified health plan
expenses and employer share of Medicare tax allocable
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below zero. If any nonrefundable portion of the credit
remains, Maple Co. applies it to the liability for the
January 10 pay date, then the January 17 pay date, and
so forth until the entire $10,000 is used.

to those wages) against the liability for the first payroll
payment of the year, but not below zero. Then reduce the
liability for each successive payroll payment in the year
until the nonrefundable portion of the credit is used. Any
credit for qualified sick and family leave wages that is
remaining at the end of the year because it exceeds the
employer share of social security tax is claimed on Form
944, line 10d, as a refundable credit. The refundable
portion of the credit doesn't reduce the liability reported on
Form 945-A. For more information about the credit for
qualified sick and family leave wages, including the dates
for which the credit may be claimed, go to IRS.gov/PLC.
Example. Maple Co. is a semiweekly schedule
depositor that pays employees every Friday. Maple Co.
had pay dates every Friday of 2020 starting January 3,
2020. Maple Co. paid qualified sick and family leave
wages on May 1 and May 8. The nonrefundable portion of
the credit for qualified sick and family leave wages for the
year is $10,000. On Form 945-A, Maple Co. will use the
$10,000 to reduce the liability for the January 3 pay date,
but not below zero. If any nonrefundable portion of the
credit remains, Maple Co. applies it to the liability for the
January 10 pay date, then the January 17 pay date, and
so forth until the entire $10,000 is used.

You may reduce your deposits by the amount of

TIP the nonrefundable and refundable portions of the

credit for qualified sick and family leave wages
(compensation), the nonrefundable and refundable
portions of the employee retention credit, and any
deferred employment taxes. For more information on
reducing deposits, see Notice 2020-22, 2020-17 I.R.B.
664, available at IRS.gov/irb/2020-17_IRB#NOT-2022-22;
Notice 2020-65, 2020-38 I.R.B. 567, available at
IRS.gov/irb/2020-38_IRB#NOT-2020-65; and IRS.gov/
ETD. Also see IRS.gov/ERC and IRS.gov/PLC for more
information, including examples, about reducing deposits.
Adjusting tax liability for the deferred amount of social security tax (Tier 1 Employer tax and/or Tier 1
Employee tax) that you pay or deposit in 2020. If you
defer the employer and/or employee share of social
security tax (Tier 1 Employer tax and/or Tier 1 Employee
tax) and subsequently pay or deposit that deferred
amount during 2020, you should report the amount of the
payment or deposit on Form 945-A on the date of the
payment or deposit and not the date of liability. You
shouldn't include any portion of the deferred amount of
social security taxes (Tier 1 Employer tax and/or Tier 1
Employee tax) already paid or deposited by December
31, 2020, on Form 944, line 10b or 10c (or Form CT-1,
line 21 or 22).
Example. If you're a semiweekly schedule depositor
that has an employment tax liability of $10,000 every 2
weeks and you defer $2,000 of the employer share of
social security tax from your August 26, 2020, deposit for
the August 19, 2020, pay date, but you deposit your
deferred amount of $2,000 together with your deposit of
$10,000 on September 23, 2020, for the September 16,
2020, pay date, you would report $8,000 for your August
19, 2020, tax liability ($10,000 minus $2,000) and $12,000
for your September 16, 2020, tax liability ($10,000 plus
$2,000) on Form 945-A.
For more information about the deferral of the employer
and employee share of social security tax (Tier 1
Employer tax and/or Tier 1 Employee tax), including the
dates the payment may be deferred, see the Instructions
for Form CT-1, the Instructions for Form 944, and
IRS.gov/ETD.

Nonrefundable portion of employee retention credit
(Form CT-1, line 17). Follow the instructions under Part
II. Record of Railroad Retirement Tax Liability in the
Instructions for Form CT-1 to adjust your tax liability on
Form 945-A.
Nonrefundable portion of employee retention credit
(Form 944, line 8c). The nonrefundable portion of the
employee retention credit is limited to the employer share
of social security tax on wages paid in the year that is
remaining after that share is first reduced by any credit
claimed on Form 944, line 8a, for the qualified small
business payroll tax credit for increasing research
activities; or any credit to be claimed on Form 5884-C,
line 11, for the work opportunity credit for qualified taxexempt organizations hiring qualified veterans; and/or any
credit claimed on Form 944, line 8b, for the nonrefundable
portion of the credit for qualified sick and family leave
wages. In completing Form 945-A, you take into account
the nonrefundable portion of the employee retention credit
against the liability for the first payroll payment of the year,
but not below zero. Then reduce the liability for each
successive payroll payment in the year until the
nonrefundable portion of the credit is used. Any employee
retention credit that is remaining at the end of the year
because it exceeds the employer share of social security
tax is claimed on Form 944, line 10e, as a refundable
credit. The refundable portion of the credit doesn't reduce
the liability reported on Form 945-A. For more information
about the employee retention credit, including the dates
for which the credit may be claimed, go to IRS.gov/ERC.
Example. Maple Co. is a semiweekly schedule
depositor that pays employees every Friday. Maple Co.
had pay dates every Friday of 2020 starting January 3,
2020. Maple Co. paid qualified wages for the employee
retention credit on May 1 and May 8. The nonrefundable
portion of the employee retention credit for the year is
$10,000. On Form 945-A, Maple Co. will use the $10,000
to reduce the liability for the January 3 pay date, but not

Correcting Previously Reported Tax Liability
Semiweekly schedule depositors. If you have been
assessed an FTD penalty and you made an error on Form
945-A and the correction won't change the total liability
you reported on Form 945-A, you may be able to reduce
your penalty by filing an amended Form 945-A.
Example. You reported a tax liability of $3,000 on
January 1. However, the liability was actually for March.
Prepare an amended Form 945-A showing the $3,000
liability on March 1. Also, you must enter the liabilities
previously reported for the year that didn't change. Write
“Amended” at the top of Form 945-A. The IRS will refigure
the penalty and notify you of any change in the penalty.
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Instructions for Form 945-A (12-2020)

line 5; Form 944-X, line 18; or Form CT-1 X, line 19, for
the year, less any previous abatements and interest-free
tax assessments.

Monthly schedule depositors. You can file Form 945-A
if you have been assessed an FTD penalty and you made
an error on the monthly tax liability section of Form 945,
CT-1, or 944. When completing Form 945-A for this
situation, only enter the monthly totals. The daily entries
aren't required.

Form CT-1 X will be revised in March 2021 and
Form 944-X will be revised in February 2021. If
CAUTION you’re using the March 2021 revision of Form
CT-1 X or the February 2021 revision of Form 944-X, the
total tax reported on the "Total liability for the year" line of
the amended Form 945-A must match the corrected tax
(Form CT-1, line 19 (line 15 for years before 2020),
combined with any correction reported on Form CT-1 X,
line 21; or Form 944, line 9, combined with any correction
reported on Form 944-X, line 22) for the year, less any
previous abatements and interest-free assessments.

!

Where to file. File your amended Form 945-A, or, for
monthly schedule depositors, your original Form 945-A at
the address provided in the penalty notice you received. If
you're filing an amended Form 945-A, you don't have to
submit your original Form 945-A.

Forms 945-X, CT-1 X, and 944-X

You may need to file an amended Form 945-A with Forms
945-X, CT-1 X, or 944-X to avoid or reduce an FTD
penalty.

Paperwork Reduction Act Notice. We ask for the
information on this form to carry out the Internal Revenue
laws of the United States. You're required to give us the
information. We need it to ensure that you're complying
with these laws and to allow us to figure and collect the
right amount of tax.

Tax decrease. If you're filing Form 945-X, CT-1 X, or
944-X, you can file an amended Form 945-A with the form
if both of the following apply.
1. You have a tax decrease.
2. You were assessed an FTD penalty.

You're not required 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 Code section
6103.

File your amended Form 945-A with Form 945-X, CT-1
X, or 944-X. The total liability reported on your amended
Form 945-A must equal the corrected amount of tax
reported on Form 945-X, CT-1 X, or 944-X. If your penalty
is decreased, the IRS will include the penalty decrease
with your tax decrease.
Tax increase—Form 945-X, CT-1 X, or 944-X filed
timely. If you're filing a timely Form 945-X, CT-1 X, or
944-X showing a tax increase, don't file an amended Form
945-A, unless you were assessed an FTD penalty caused
by an incorrect, incomplete, or missing Form 945-A. Don't
include the tax increase reported on Form 945-X, CT-1 X,
or 944-X on an amended Form 945-A you file.

The time needed to complete and file this form will vary
depending on individual circumstances. The estimated
average time is:
Recordkeeping . . . . . . . . . . . . . . . . . . . . .
Learning about the law or the form . . . . . . .
Preparing and sending the form to the IRS . .

Tax increase—Form 945-X, CT-1 X, or 944-X filed
late. If you owe tax and are filing late, that is, after the due
date of the return for the filing period in which you
discovered the error, you must file the form with an
amended Form 945-A. Otherwise, the IRS may assess an
“averaged” FTD penalty.
The total tax reported on line M of Form 945-A must
match the corrected tax (Form 945, line 3; Form 944,
line 9; Form CT-1, line 19 (line 15 for years before 2020)),
combined with any correction reported on Form 945-X,

Instructions for Form 945-A (12-2020)

6 hr., 27min.
6 min.
12 min.

If you have comments concerning the accuracy of
these time estimates or suggestions for making this form
simpler, we would be happy to hear from you. You can
write to the IRS at the address listed in the Privacy Act
Notice for your tax return.

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