What IRS Form 945 (2020) Is For

IRS Form 945, Annual Return of Withheld Federal Income Tax, is used to report federal income tax withheld from nonpayroll payments during the 2020 calendar year (IRS Instructions for Form 945 (2020)). Businesses and organizations must file this form if they withheld or were required to withhold federal income tax from payments such as pensions, annuities, IRA distributions, backup withholding, gambling winnings, military retirement, Indian gaming profits, and certain voluntary withholding elections on government payments.

When You'd Use Form 945 for 2020 (Late or Amended Filing)

You would file Form 945 for 2020 as a late or amended return in several scenarios. Late filings typically occur when you receive IRS notices about unfiled returns, discover you had withholding obligations you didn't report, or realize you failed to meet the original due date of February 1, 2021 (or February 10, 2021, if all deposits were made timely) (IRS Instructions for Form 945 (2020)). For amended returns, you would use Form 945-X to correct administrative errors where the amount you reported differs from what you actually withheld. Keep in mind that the three-year refund statute generally applies—if you're claiming a refund for overpaid taxes, the amended return must typically be filed within three years of the original due date to preserve refund rights.

Key Rules Specific to 2020

The 2020 tax year introduced Form 1099-NEC to report nonemployee compensation, replacing Schedule C-1 of Form 1099-MISC for this purpose, though backup withholding on such payments still gets reported on Form 945 (IRS Instructions for Form 945 (2020)). Filing addresses changed for some locations in 2020, so verify the correct mailing address based on your location and whether you're including payment. Electronic federal tax deposits remained mandatory for all Form 945 taxes, with the same-day wire payment option available through the Federal Tax Collection Service if regular EFTPS deposits were missed. The $2,500 threshold for deposit requirements and monthly versus semiweekly deposit schedules based on prior year tax liability continued to apply.

Step-by-Step (High Level)

• Gather tax transcripts and records: Request transcripts using Form 4506-T or online tools to verify your 2020 withholding amounts and any previous filings
  
  
• Complete the 2020 Form 945: Use the correct year form with dollar amounts to the left of the line and cents to the right—never round to whole dollars
  
  
• Attach required schedules: Include Form 945-A if you were a semiweekly depositor or exceeded $100,000 in monthly liability; attach Form 945-V if paying by check
  
  
• File and pay: Submit electronically when possible or mail to the correct address based on your location and payment status; use electronic payment methods for any balance due
  
  
• Keep complete copies: Maintain all forms, supporting documentation, and proof of filing and payment for your records
  
  

Common Mistakes and How to Avoid Them

• Mixing payroll and nonpayroll withholding: Never report W-2 wage withholding on Form 945—this belongs on Forms 941, 943, 944, or Schedule H (IRS Instructions for Form 945 (2020))
  
  
• Incorrect backup withholding classification: Report backup withholding on line 2, not line 1, even for gambling winnings where regular withholding goes on line 1
  
  
• Wrong deposit schedule determination: Base your 2021 deposit schedule on your 2019 Form 945 line 3 amount, not 2020—monthly if $50,000 or less, semiweekly if more
  
  
• Mismatched EIN usage: Ensure the EIN on Form 945 exactly matches the EIN on your information returns (1099s, W-2G) reporting the same withholding
  
  
• Incomplete liability reporting: If total tax is $2,500 or more, line 3 must equal your monthly liability total on line 7M or Form 945-A—use Form 945-A when required for semiweekly depositors
  
  
• Filing multiple forms for one year: File only one Form 945 per calendar year regardless of how many types of nonpayroll payments you made
  
  

What Happens After You File

Processing typically takes several weeks to several months depending on whether you filed electronically or by mail and current IRS workload. If you owe additional tax, expect penalty and interest calculations from the IRS, though you can request installment agreements online if you owe $50,000 or less and can pay within 24 months (About Form 9465, Installment Agreement Request - IRS.gov). The IRS may send notices requesting additional information, proposing changes, or acknowledging your return. You have appeal rights if you disagree with any IRS determinations—respond timely to notices and consider professional representation for complex situations. For payment difficulties, explore options like Form 9465 for installment agreements or the online payment agreement application at IRS.gov/OPA.

FAQs

I never filed Form 945 for 2020, but I think I should have. What's the penalty?

The failure-to-file penalty is 5% of unpaid tax per month up to 25% maximum, plus interest (IRS Instructions for Form 945 (2020)). File immediately to minimize penalties and consider requesting reasonable cause abatement if you have valid reasons for the delay.

Can I still get a refund if I file Form 945 for 2020 late?

Generally yes, if you file within three years of the original due date (approximately February 1, 2024, for 2020 returns). After that, refund rights typically expire, though you can still file to avoid penalties on any tax owed.

How do I get transcripts to help complete my late 2020 Form 945?

Use Form 4506-T to request transcripts by mail, or check IRS.gov for online transcript services (About Form 4506-T, Request for Transcript of Tax Return - IRS.gov). Business tax transcripts help verify previously filed information and deposit history.

Should I file an amended state return if I file a late or corrected federal Form 945?

Check your state's requirements—most states require amended returns within 90 days of federal changes, but rules vary significantly by state and may not apply to Form 945 since it covers nonpayroll withholding.

I made deposits but never filed the return. Will I get credit for my deposits?

Yes, properly made deposits get credited to your account, but you still must file the return to avoid failure-to-file penalties. The return matches deposits to your tax liability.

Can I e-file a 2020 Form 945 in 2025?

Electronic filing availability for prior-year returns varies by software provider and may be limited. Check with your tax software or professional, or file by mail using the 2020 form and instructions.

What's the difference between Form 945 and Form 945-X?

Form 945 is the original annual return; Form 945-X corrects administrative errors on previously filed Form 945 returns (About Form 945-X, Adjusted Annual Return of Withheld Federal Income Tax - IRS.gov). Use 945-X only when you reported different amounts than you actually withheld—not for discovered liabilities or other changes.

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