IRS Form 945 – IRS Forms, Instructions, Pubs 2026 – If you’re responsible for withholding federal income tax from nonpayroll payments, IRS Form 945 is essential for reporting those amounts annually. This form helps ensure compliance with tax regulations for payments like pensions, annuities, gambling winnings, and backup withholding. In this comprehensive guide, we’ll cover everything you need to know about Form 945 for the 2025 tax year, including who must file, deadlines, filing instructions, and recent updates. Whether you’re a business owner, financial institution, or tax professional, staying informed can help you avoid penalties and streamline your tax obligations.
What Is IRS Form 945?
IRS Form 945, titled “Annual Return of Withheld Federal Income Tax,” is used to report federal income tax withheld from nonpayroll payments during the calendar year. Unlike payroll taxes reported on forms like Form 941 or Form 944, Form 945 focuses exclusively on nonpayroll withholding. This includes taxes reported on Forms 1099 (such as 1099-R for retirement distributions or 1099-MISC/NEC for certain payments) and Form W-2G for gambling winnings.
The form reconciles the total withheld taxes with deposits made throughout the year. If there’s a balance due or an overpayment, it’s addressed on the form. For the 2025 tax year, the form includes sections for entity information, tax calculations, deposit summaries, and options for overpayments, such as direct deposit refunds—a new feature introduced in 2025.
Here’s a visual example of what Form 945 looks like:
Key sections on the form include:
- Line 1: Federal income tax withheld from pensions, annuities, IRAs, gambling winnings, etc.
- Line 2: Backup withholding.
- Line 3: Total taxes (sum of Lines 1 and 2).
- Line 4: Total deposits for the year, including prior overpayments.
- Line 5: Balance due if taxes exceed deposits.
- Line 6: Overpayment details, with options to apply to the next return or receive a refund via direct deposit.
- Line 7: Monthly summary of federal tax liability (for monthly depositors; semiweekly depositors use Form 945-A).
You can download the official 2025 Form 945 PDF from the IRS website: https://www.irs.gov/pub/irs-pdf/f945.pdf.
Who Must File IRS Form 945?
You must file Form 945 if you withheld (or were required to withhold) federal income tax from nonpayroll payments in 2025. This applies to payers such as:
- Pension and annuity administrators.
- Gambling establishments (e.g., casinos reporting winnings).
- Financial institutions handling IRA distributions or backup withholding.
- Businesses making payments subject to voluntary withholding, like dividends from Alaska Native Corporations.
- Employers withholding on certain government payments or Indian gaming profits.
If you had no nonpayroll tax liability for the year, you don’t need to file. However, if you’re outsourcing payroll or tax duties, remember that you’re still responsible for compliance. Note: Do not use Form 945 for wage withholding; that’s handled on other forms like Form 941.
What Types of Payments Are Reported on Form 945?
Form 945 covers a specific range of nonpayroll payments where federal income tax is withheld. Common examples include:
- Distributions from retirement plans (e.g., 401(k), 403(b), governmental 457(b) plans).
- Annuities and IRA distributions.
- Military retirement payments.
- Gambling winnings (reported on Form W-2G).
- Indian gaming profits distributed to tribal members.
- Voluntary withholding on certain government payments (e.g., Social Security or unemployment benefits).
- Backup withholding on payments like interest, dividends, or nonemployee compensation (e.g., via Form 1099-NEC).
Withholding from nonqualified pension plans or wages is not reported here—use Form 941 or 944 instead.
When and How to File Form 945 for 2025
For the 2025 tax year, file Form 945 by February 2, 2026. If you’ve made timely deposits in full for the year’s taxes, you get an extension to February 10, 2026. The form is filed annually, not quarterly.
Filing Methods
- Electronic Filing: Encouraged by the IRS. Use the Modernized e-File (MeF) system or approved software. A valid Employer Identification Number (EIN) is required.
- Paper Filing: Mail to the address based on your location (see IRS instructions for details). Include Form 945-V if paying a balance due by check or money order.
If filing paper returns, ensure they’re postmarked by the due date. Electronic funds transfer (EFT) is mandatory for deposits via EFTPS or IRS Direct Pay.
Depositing Withheld Taxes
Deposits are required throughout the year based on your schedule:
- Monthly Depositors: Deposit by the 15th of the following month.
- Semiweekly Depositors: Deposit on Wednesdays/Fridays depending on payment dates; complete Form 945-A.
If total taxes are under $2,500, you may pay with the return instead of depositing.
Penalties for Late Filing or Non-Compliance
Failing to file Form 945 on time or pay/deposit taxes can result in penalties:
- Late Filing Penalty: Up to 25% of unpaid taxes, unless reasonable cause is shown.
- Late Payment Penalty: 0.5% per month on unpaid amounts.
- Failure to Deposit Penalty: Tiered rates from 2% to 15% based on delay.
- Trust Fund Recovery Penalty: 100% of unpaid withheld taxes for responsible persons who willfully fail to comply.
Additional penalties apply for not filing information returns (e.g., Forms 1099) or furnishing payee statements. To request abatement, use Form 843 and provide an explanation.
Recent Changes and Updates for 2025
As of 2026, key updates include:
- Direct Deposit Refunds: Now available for overpayments, per Executive Order 14247 (March 25, 2025).
- Electronic Payments Mandatory: Balance due payments must be electronic.
- Transcript Access: Form 945 transcripts for 2023 and later available via IRS business tax accounts.
- Form 945-X Electronic Filing: Available for corrections.
Always check the IRS website for the latest developments, as legislation can impact requirements.
How to Get Help with Form 945?
For detailed guidance, refer to the official IRS Instructions for Form 945. If you need an EIN, apply online at IRS.gov/EIN. Consult Pub. 15 (Circular E) for withholding rules. For personalized assistance, consider a tax professional or contact the IRS at 800-829-4933.
By filing IRS Form 945 accurately and on time, you ensure compliance and avoid costly penalties. Download the form today and review your 2025 withholding records to prepare.