What Form 945 covers
Form 945, Annual Return of Withheld Federal Income Tax, reports income tax withheld from payments that are not wages: backup withholding on 1099 payments, withholding from pensions, annuities and IRA distributions, withholding on gambling winnings, military retirement, and Indian gaming profits. Wage withholding stays on Form 941 (or 944); the two must never be mixed, and deposits for each are made under separate tax types in EFTPS.
A payer files one Form 945 per EIN per year, regardless of how many 1099 types the withholding came from. If you withheld nothing during the year and have no 945 filing requirement, you do not file a zero return unless the IRS has told you to.
Due dates
| Item | Date |
|---|---|
| Form 945 for 2025 | February 2, 2026 (January 31 is a Saturday). February 10 if every deposit was made on time and in full |
| Form 945 for 2026 | February 1, 2027 (January 31 is a Sunday); February 10 with timely deposits |
| Form 945-A (daily liability record) | Attached to the 945 by semiweekly depositors and by anyone who hit the $100,000 next-day rule |
The return is filed electronically through an authorized provider or the Modernized e-File system, or on paper to the address in the instructions. It is separate from the 1099 filing; a payer files the 1099s (showing each payee’s withholding in box 4) by the 1099 due dates and the 945 by the dates above.
The deposit schedule
Deposits go through EFTPS, and the schedule is determined by a lookback period that is different from the 941 lookback: the total tax reported on your Form 945 for the second preceding calendar year. For 2026 deposits, that is the 2024 return.
| If 945 tax in the lookback year was | You are | Deposit by |
|---|---|---|
| $50,000 or less | A monthly depositor | The 15th of the following month |
| More than $50,000 | A semiweekly depositor | Wednesday for withholding on Wednesday–Friday payments; Friday for Saturday–Tuesday payments |
| Any amount, if you accumulate $100,000 or more on any day | Subject to the next-day rule | The next business day, and semiweekly for the rest of the year and the following year |
| Less than $2,500 for the whole year | Exempt from deposits | May pay with the return, if you were not already required to deposit |
A new payer with no 945 history is a monthly depositor in its first year. Because most companies backup withhold only occasionally, they are almost always monthly depositors, and the practical failure is not the schedule but forgetting that a one-off withholding in March creates a deposit due April 15.
Backup withholding is deposited under Form 945, tax type 945, in EFTPS. Depositing it with the payroll 941 deposit is the single most common Form 945 error, and it produces a notice on both returns.
The lines that matter
| Line | What goes there |
|---|---|
| 1 | Federal income tax withheld from pensions, annuities, IRAs, gambling winnings and other nonpayroll payments (not backup withholding) |
| 2 | Backup withholding: the total taken from all payees under section 3406 during the year |
| 3 | Total taxes (lines 1 + 2). If $2,500 or more, complete the monthly summary (line 7) or attach Form 945-A |
| 4 | Total deposits for the year, including any overpayment applied from the prior year |
| 5 / 6 | Balance due or overpayment |
| 7 | Monthly summary of liability, for monthly depositors with line 3 of $2,500 or more |
Reconciling to the 1099s
The IRS compares line 2 of the 945 with the sum of box 4 (federal income tax withheld) across every 1099 you filed under the same EIN. They should be equal. Before you file either, run the reconciliation yourself: the withholding ledger in accounts payable, the box 4 totals in the 1099 file, the EFTPS deposit history, and the 945 draft all showing the same number. A payee who was withheld on must receive a 1099 even if their payments were below the reporting threshold, because the withholding itself is reportable and is their credit.
The backup withholding calculator shows where each figure lands, and the year-round checklist puts the reconciliation in December, before either return is filed.
Mistakes that generate notices
- Withholding shown on 1099s with no Form 945 filed. The IRS sees box 4 amounts, finds no return, and issues a notice for the missing 945.
- Depositing 945 tax as 941 tax. Creates an underpayment on the 945 and an overpayment on the 941; fixing it means a call or a letter.
- Late deposits. Failure-to-deposit penalties of 2% (1–5 days late), 5% (6–15 days), 10% (over 15 days) and 15% (after an IRS demand), the same schedule as payroll.
- Refunding withheld amounts to the payee. Once withheld and deposited, the money belongs to the IRS; the payee claims it on their return. The payer cannot give it back after the fact.
- Skipping withholding because the 945 process is unfamiliar. A payer that should have withheld and did not is liable for the amount it failed to withhold. That is the real cost, and it dwarfs the paperwork.
Questions people ask
We backup withheld $400 once, all year. Do we still file?
Yes. Any backup withholding requires a Form 945. Under $2,500 for the year you may pay it with the return instead of depositing, but the return is still due.
Does Form 945 go to the states?
No. Some states have their own backup-withholding or nonpayroll withholding returns; most do not require backup withholding at all. Check the state where the payee lives.
Can we file one 945 for several subsidiaries?
Only if they withheld under one EIN. Each EIN that withheld files its own return, matching the 1099s filed under that EIN.
What if we withheld but the payee later gave us a valid TIN?
Stop withholding on the next payment. Amounts already withheld stay deposited and go on the 945 and the payee’s 1099; the payee gets the credit when they file.