Form 945: What It Is and How to File It (2026)

By Samantha Clark

Aug. 07, 2026

Hired a freelancer who never returned a valid W-9? You have to withhold 24% of their pay, and that goes on Form 945. The 945 tax form covers federal income tax withheld from payments that aren't wages, so it never lands on a pay stub. Here's who files it, how to fill it in, and what late filing costs.

Key Takeaways

Form 945 reports federal income tax withheld from non-payroll payments, including pensions, IRA distributions, gambling winnings, and backup withholding.
You file only for years in which you actually withheld tax. There is no minimum dollar amount.
The return is due January 31, or February 10 if every deposit was made on time and in full.
Your 2026 deposit schedule depends on line 3 of your 2024 Form 945, not on a rolling quarterly window.

Table Of Contents

What Is Form 945?
Who Must File Form 945?
How to Fill Out Form 945 Line by Line
Form 945 Deposit Schedules and the Lookback Period
Form 945 Penalties and Deadlines
How to File Form 945

What Is Form 945?

Form 945, the Annual Return of Withheld Federal Income Tax, reports federal income tax withheld from non-payroll payments: pensions, IRA distributions, gambling winnings on Form W-2G, and anything subject to backup withholding. A solo 401(k) distribution with 20% mandatory withholding lands here too.

Who Must File Form 945?

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You must file Form 945 if you withheld, or were required to withhold, federal income tax from non-payroll payments that year, including anything paid to contractors. There's no dollar threshold. If you had nothing to report for a given year, you don't file at all.

How to Fill Out Form 945 Line by Line

Lines A Through 3

Enter your business name, Employer Identification Number (EIN), and address. Check line A only for a final return. Line 1 is tax withheld from pensions, annuities, and IRAs; line 2 backup withholding; line 3 adds them.

Lines 4 Through 7

Line 4 is total deposits, line 5 balance due, line 6a an overpayment. Complete line 7 if you deposited monthly all year and line 3 hit $2,500. Semiweekly depositors use Form 945-A.

Need records of what you withheld? Our pay stub templates make that easy.

Form 945 Deposit Schedules and the Lookback Period

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Your schedule keys off the second preceding calendar year. For 2026, check line 3 of your 2024 Form 945: $50,000 or less makes you a monthly depositor, more a semiweekly one. $100,000 of liability in one day flips you to semiweekly. Deposit through EFTPS, not alongside Form 941 deposits. Enroll early; activation takes days.

Form 945 Penalties and Deadlines

File by January 31, or the next business day when that's a weekend or holiday. For tax year 2026 that's Monday, February 1, 2027. Deposit on time and in full and you get until February 10. Late deposits draw a penalty of 2% to 15%. Missed filings cost more.

How to File Form 945

E-file through the IRS employment tax system. Paper filers mail to Kansas City or Ogden, enclosing Form 945-V with any check. Keep the return, the 1099s, and deposit confirmations for four years.

Conclusion

Form 945 is short, but its deposit rules trip filers up. Get your withholding totals right and January filing takes minutes. Need records backing up what you withheld? Create them with our paystub generator.

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Frequently Asked Questions

Form 945 is an annual return for federal income tax withheld from non-payroll payments such as pension distributions, IRA distributions, certain government payments, and backup withholding. Form 941 is a quarterly return covering employee wages and the payroll taxes on them, Social Security and Medicare. Farm employers file Form 943 instead, and the smallest employers file Form 944 annually.

The IRS charges 2% for deposits 1 to 5 days late, 5% at 6 to 15 days, and 10% beyond 15 days. That rises to 15% more than 10 days after the first notice. The tiers replace each other rather than stacking. Withheld tax you never hand over can trigger the trust fund recovery penalty, which is 100% of the unpaid amount.

Yes. Go through the IRS employment tax e-file system or an authorized provider and skip the paper mailing addresses entirely. Deposits stay separate from the return, though, and still have to run through the Electronic Federal Tax Payment System. Form 945-X, the correction return, now goes through Modernized e-File too.

Form 945-A, the Annual Record of Federal Tax Liability, records your tax liability day by day. Semiweekly schedule depositors complete it instead of line 7 on Form 945. Monthly depositors who accumulate $100,000 of liability in a single day and convert to semiweekly mid-year use it too.

File Form 945-X, the Adjusted Annual Return of Withheld Federal Income Tax or Claim for Refund. Use it to correct amounts reported on a previously filed Form 945. If the underlying Form 1099-NEC, Form 1099-MISC, or Form 1099-R was also wrong, correct that separately. Fix the error as soon as you find it to limit interest and penalties.

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