What IRS Form 945 (2021) Is For

IRS Form 945, Annual Return of Withheld Federal Income Tax, is used to report federal income tax withheld from nonpayroll payments made during 2021 (IRS Instructions for Form 945 (2021)). You must file this form if you withheld or were required to withhold federal income tax from payments such as pensions, retirement plan distributions, military retirement, gambling winnings, Indian gaming profits, backup withholding on contractor payments, and voluntary withholding on certain government payments or Alaska Native Corporation distributions.

When You'd Use Form 945 for 2021 (Late or Amended Filing)

You may need to file Form 945 for 2021 as a late filing if you received IRS notices indicating missing returns, balance due amounts, or if you discovered unreported withholding that creates a refund opportunity. The original due date was January 31, 2022 (or February 10, 2022 if all deposits were made timely), but you can still file late returns (IRS Instructions for Form 945 (2021)). For refund claims, you generally have three years from the original due date or two years from when you paid the tax to claim overpayments. If you need to correct administrative errors on a previously filed Form 945—meaning the amounts you reported don't match what you actually withheld—you would use Form 945-X rather than filing a new Form 945.

Key Rules Specific to 2021

The 2021 Form 945 follows standard federal income tax withholding rules without significant year-specific changes from prior versions. Electronic filing was encouraged, and federal tax deposits were required to be made through Electronic Federal Tax Payment System (EFTPS) (IRS Instructions for Form 945 (2021)). The monthly versus semiweekly deposit schedule determination was based on your 2019 Form 945 total tax liability—monthly schedule if $50,000 or less, semiweekly if more than $50,000. The $100,000 next-day deposit rule applied if you accumulated that amount of liability on any single day.

Step-by-Step (High Level)

• Gather tax transcripts from IRS.gov or by calling 800-908-9946 to verify any deposits already made and ensure accurate reporting
  
  
• Complete the correct 2021 Form 945 using the specific year's form and instructions, not current-year versions
  
  
• Attach Form 945-A if you were a semiweekly depositor or became one during 2021 due to the $100,000 rule
  
  
• Mail to the correct address based on your location and whether you're including payment—electronic filing is available through approved software providers
  
  
• Keep copies of all forms, supporting documentation, and proof of mailing for your records
  
  
• Make any required payment using appropriate methods (EFTPS for required depositors, other options available for smaller amounts)
  
  

Common Mistakes and How to Avoid Them

• Mixing payroll and nonpayroll withholding: Don't report W-2 wages or employment tax withholding on Form 945—these belong on Forms 941, 943, 944, or Schedule H (Form 1040)
  
  
• Using wrong deposit codes: Form 945 taxes require specific Electronic Federal Tax Payment System codes and cannot be combined with other employment tax deposits
  
  
• Incorrect EIN usage: Ensure the Employer Identification Number exactly matches IRS records and your information returns (Forms 1099, W-2G)—mismatches cause processing delays and penalties
  
  
• Missing Form 945-A: If you were a semiweekly depositor at any point during 2021, you must file Form 945-A with your return rather than completing the monthly summary on Form 945
  
  
• Confusing Form 945 vs. 945-X: Use Form 945-X only for administrative errors (when reported withholding doesn't match actual withholding); file original Form 945 for completely missing returns
  
  
• Wrong tax year form: Always use the 2021 version of forms and instructions, available in IRS prior-year publications, not current-year versions
  
  

What Happens After You File

The IRS typically processes employment tax returns within several weeks depending on filing method. You may receive notices requesting additional information or confirming receipt and processing. If you owe money, you'll receive a balance due notice with payment options including online installment agreements through IRS.gov/OPA for amounts under $25,000 that can be paid within 24 months (IRS Instructions for Form 945 (2021)). Interest and penalties accrue from the original due date until paid in full. If you disagree with any IRS determination, you have appeal rights explained in notices received. Processing may be slower for 2021 returns filed significantly late, so maintain records of filing and monitor your account through IRS.gov or by calling the Business & Specialty Tax Line at 800-829-4933.

FAQs

Can I still get a refund for overpaid 2021 withholding if I file late?

Yes, but you must file within three years of the original due date (January 31, 2025 for 2021 returns) or two years from when you paid the tax, whichever is later, to claim refunds.

What penalties apply to late-filed Form 945 for 2021?

The failure-to-file penalty is 5% of unpaid tax per month (or partial month), up to 25% maximum, plus interest from the original due date. If you don't owe tax, penalties typically don't apply to late filing.

How do I get transcripts to help complete my late 2021 Form 945?

Request Account Transcripts online at IRS.gov, call 800-908-9946, or mail Form 4506-T to see deposits made and any IRS record of previous filings for 2021.

Should I also file amended state returns if I file a late Form 945?

Form 945 only covers federal withholding, but if your state has similar nonpayroll withholding requirements that you also missed, contact your state tax agency about their filing requirements and deadlines.

What if I discover I should have been making deposits during 2021 but didn't?

File Form 945 immediately and pay all tax due with the return—deposit penalties will be less severe than continued non-filing, and you avoid the trust fund recovery penalty on responsible parties.

Can I e-file a 2021 Form 945 now, or must I paper file?

Electronic filing options may be available through tax software providers for prior-year returns, though availability varies—check with your software provider or tax professional for current options.

What's the difference between Form 945 and Form 945-X for fixing 2021 errors?

Use Form 945 if you never filed for 2021 or need to report additional withholding; use Form 945-X only if you previously filed Form 945 but reported incorrect withholding amounts (administrative errors only).

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