General Instructions:Understanding Form 945-X

What Is the Purpose of Form 945-X?

Use Form 945-X to correct administrative errors only on a previously filed Form 945. An administrative error occurs if the federal income tax (including backup withholding) you reported on Form 945 is not the amount you actually withheld from payees. For example, if the total federal income tax you actually withheld was incorrectly reported on Form 945 due to a mathematical or transposition error, this would be an administrative error.

Use Form 843, Claim for Refund and Request for Abatement, to request a refund or abatement of assessed interest or penalties. Do not request abatement of assessed interest or penalties on Form 945 or Form 945-X.

We use the terms “correct” and “corrections” on Form 945-X and in these instructions to include interest-free adjustments under sections 6205 and 6413 and claims for refund and abatement under sections 6402, 6414, and 6404. See Rev. Rul. 2009-39 for examples of how the interest-free adjustment and claim for refund rules apply in 10 different situations. You can find Rev. Rul. 2009-39, 2009–52 I.R.B. 951, at www.irs.gov/irb/2009-52_IRB/ar14.html.

When you discover an error on a previously filed Form 945, you must:

  • Correct that error using Form 945-X,

  • File a separate Form 945-X for each Form 945 that you are correcting, and

  • File Form 945-X separately. Do not file Form 945-X with Form 945.

Report the correction of underreported and overreported amounts for the same year on a single Form 945-X, unless you are requesting a refund or abatement. If you are requesting a refund or abatement, file one Form 945-X correcting the underreported amounts and a second Form 945-X correcting the overreported amounts.

You will use the adjustment process if you underreported tax and are making a payment, or if you overreported tax and will be applying the credit to Form 945 for the period during which you file Form 945-X. However, see the Caution under Is There a Deadline for Filing Form 945-X, later, if you are correcting overreported amounts during the last 90 days of a period of limitations. You will use the claim process if you overreported tax and are requesting a refund or abatement of the overreported amount. Follow the chart on page 8 for help in choosing whether to use the adjustment process or the claim process.

Be sure to give us a detailed explanation on line 7 for each correction that you show on Form 945-X.

Do not use Form 945-X to correct Forms CT-1, 941, 943, or 944. Instead, use the “X” form that corresponds to those forms (Form CT-1 X, 941-X, 943-X, or 944-X). If you did not file a Form 945 for one or more years, do not use Form 945-X. Instead, file Form 945 for each of those years.

Where Can You Get Help?

For help filing Form 945-X or for questions about withheld federal income tax and tax corrections, you can:

  • Call the IRS Business and Specialty Tax Line toll free at 1-800-829-4933 or 1-800-829-4059 (TDD/TTY for persons who are deaf, hard of hearing, or have a speech disability) Monday–Friday from 7:00 a.m.– 7:00 p.m. local time (Alaska and Hawaii follow Pacific time),

  • Visit the IRS website at www.irs.gov/businesses and click on the Employment Taxes link under Businesses Topics, or

  • See Pub. 15 (Circular E), Employer's Tax Guide.

See also How Can You Order Forms, Instructions, and Publications from the IRS, later.

When Should You File Form 945-X?

File Form 945-X when you discover an administrative error on a previously filed Form 945.

However, if your only errors on Form 945 relate to federal tax liabilities reported on your Monthly Summary of Federal Tax Liability on Form 945 or on Form 945-A, Annual Record of Federal Tax Liability, do not file Form 945-X. For more information about correcting federal tax liabilities reported on your Monthly Summary of Federal Tax Liability on Form 945 or on Form 945-A, see the Form 945-A instructions.

Due dates.   The due date for filing Form 945-X depends on when you discover an error and if you underreported or overreported tax. If you underreported tax, see Underreported tax later. For overreported amounts, you may choose to either make an interest-free adjustment or file a claim for refund or abatement. If you are correcting overreported amounts, see Overreported tax—adjustment process and Overreported tax—claim process, later.

   If any due date falls on a Saturday, Sunday, or legal holiday, you may file Form 945-X on the next business day. If we receive Form 945-X after the due date, we will treat Form 945-X as filed on time if the envelope containing Form 945-X is properly addressed, contains sufficient postage, and is postmarked by the U.S. Postal Service on or before the due date, or sent by an IRS-designated private delivery service on or before the due date. If you do not follow these guidelines, we will consider Form 945-X filed when it is actually received. See Pub. 15 (Circular E) for more information on legal holidays and IRS-designated private delivery services.

Underreported tax.   If you are correcting underreported tax, you must file Form 945-X by the due date of the return for the return period in which you discovered the error (January 31 of the following year) and pay the amount you owe by the time you file. Doing so will generally ensure that your correction is interest free and not subject to failure-to-pay or failure-to-deposit penalties. See What About Penalties and Interest, later.

  If Form 945-X is filed late (after the due date of the return for the return period in which you discovered the error), you must attach an amended Form 945-A. Otherwise, the IRS may assess an “averaged” failure-to-deposit penalty. The total tax reported on line M of Form 945-A must match the corrected tax (Form 945, line 3, combined with any correction reported on Form 945-X, line 5) for the year, less any previous abatements and interest-free tax assessments.

Example—You owe tax.

On February 6, 2013, you discovered that you underreported $10,000 of federal income tax actually withheld on your 2012 Form 945 due to a mathematical error. File Form 945-X and pay the amount you owe by January 31, 2014, because you discovered the error in 2013 and January 31, 2014, is the due date for that year. If you file Form 945-X before January 31, 2014, pay the amount you owe when you file.

Overreported tax—adjustment process.   If you overreported tax and choose to apply the credit to Form 945, file an adjusted return on Form 945-X soon after you discovered the error but more than 90 days before the period of limitations on the credit or refund for correcting the Form 945 expires. See Is There a Deadline for Filing Form 945-X, later.

Example—You want your credit applied to Form 945.

On May 1, 2014, you discover that you overreported $9,000 in backup withholding tax on your 2013 Form 945 due to a transposition error. You file Form 945-X on June 2, 2014. The IRS treats your credit as a tax deposit made on January 1, 2014. When you file your 2014 Form 945, include the amount from Form 945-X, line 5, on line 4 (“Total deposits”) of your 2014 Form 945.

Overreported tax—claim process.   If you overreported tax, you may choose to file a claim for refund or abatement on Form 945-X any time before the period of limitations on the credit or refund expires. If you also need to correct any underreported amounts, you must file another Form 945-X reporting only corrections to the underreported amounts. See Is There a Deadline for Filing Form 945-X, later.

Is There a Deadline for Filing Form 945-X?

Generally, you may correct overreported taxes on a previously filed Form 945 if you file Form 945-X within 3 years of the date Form 945 was filed or 2 years from the date you paid the tax reported on Form 945, whichever is later. You may correct underreported taxes on a previously filed Form 945 if you file Form 945-X within 3 years of the date the Form 945 was filed. We call each of these time frames a “period of limitations.” For purposes of the period of limitations, Form 945 is considered filed on April 15 of the succeeding calendar year if filed before that date.

Example.

You filed your 2010 Form 945 on January 27, 2011, and payments were timely made. The IRS treats the return as if it were filed on April 15, 2011. On January 22, 2014, you discovered that you overreported federal income tax withheld on that form by $10,000 due to a mathematical error. To correct the error, you must file Form 945-X by April 15, 2014, which is the end of the period of limitations, and use the claim process.

If you file Form 945-X to correct overreported amounts in the last 90 days of a period of limitations (after January 15, 2014, in the example above), you must use the claim process. You cannot use the adjustment process. If you are also correcting underreported amounts, you must file another Form 945-X to correct the underreported amounts using the adjustment process and pay any tax due.

Where Should You File Form 945-X?

Send your completed Form 945-X to the Internal Revenue Service Center shown below.

IF you are in . . . THEN use this address . . .
Special filing addresses for exempt organizations; federal, state, and local governmental entities; and Indian tribal governmental entities; regardless of location Department of the Treasury  
Internal Revenue Service  
Ogden, UT 84201-0042
Connecticut, Delaware, District of Columbia, Florida, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia, Wisconsin Department of the Treasury 
Internal Revenue Service  
Cincinnati, OH 45999-0042
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, Wyoming Department of the Treasury 
Internal Revenue Service  
Ogden, UT 84201-0042
No legal residence or principal place of business in any state Internal Revenue Service  
P.O. Box 409101  
Ogden, UT 84409

How Should You Complete Form 945-X?

Use One Form 945-X for Each Year You Are Correcting

Use a separate Form 945-X for each Form 945 that you are correcting. For example, if you found errors on your Forms 945 for 2012 and 2013, file one Form 945-X to correct the 2012 Form 945. File a second Form 945-X to correct the 2013 Form 945.

EIN, Name, and Address

Enter your EIN, name, and address in the spaces provided. Also enter your name and EIN on the top of page 2 and on any attachments. If your address has changed since you filed your Form 945, enter the corrected information and the IRS will update your address of record.

Return You Are Correcting

In the box at the top of page 1 of Form 945-X, enter the calendar year of the Form 945 you are correcting. Enter the calendar year on page 2. Be sure to write your name, EIN, Form 945-X, and calendar year on the top of any attachments.

Enter the Date You Discovered Errors

You must enter the date you discovered errors. You discover an error when you have enough information to be able to correct it. If you are reporting several errors you discovered at different times, enter the earliest date you discovered an error here. Report any subsequent dates and related errors on line 7.

Must You Make an Entry on Each Line?

You must provide all of the information requested at the top of page 1 of Form 945-X. You must check one box (but not both) in Part 1. In Part 2, if any line does not apply, leave it blank. Complete Parts 3 and 4 as instructed.

How Should You Report Negative Amounts?

Form 945-X uses negative numbers to show reductions in tax (credits) and positive numbers to show additional tax (amounts you owe).

When reporting a negative amount in column 3, use a minus sign instead of parentheses. For example, enter “-10.59” instead of “(10.59).” However, if you are completing the return on your computer and your software only allows you to use parentheses to report negative amounts, you may use them.

How Should You Make Entries on Form 945-X?

You can help the IRS process your Form 945-X timely and accurately if you follow these guidelines.

  • Type or print your entries.

  • Use Courier font (if possible) for all typed or computer-generated entries.

  • Omit dollar signs. You may use commas and decimal points, if desired. Enter dollar amounts to the left of any preprinted decimal point and cents to the right of it.

  • Always show an amount for cents. Do not round entries to whole dollars.

  • Complete both pages and sign Form 945-X on page 2.

  • Staple multiple sheets in the upper-left corner.

What About Penalties and Interest?

Generally, your correction of an underreported amount will not be subject to a failure-to-pay penalty, failure-to-deposit penalty, or interest if you:

  • File on time (by the due date of Form 945 for the year in which you discover the error),

  • Pay the amount shown on line 5 by the time you file Form 945-X,

  • Enter the date you discovered the error, and

  • Explain in detail the grounds and facts relied on to support the correction.

No correction will be eligible for interest-free treatment if any of the following apply.

  • The amounts underreported relate to an issue that was raised in an examination of a prior period.

  • You knowingly underreported your tax liability.

  • You received a notice and demand for payment.

If you receive a notice about a penalty after you file this return, reply to the notice with an explanation and we will determine if you meet reasonable-cause criteria. Do not attach an explanation when you file your return.

Overview of the Process

The process to correct a previously filed Form 945 or file a claim for refund is outlined below.

If you underreported the tax.

If you underreported the tax actually withheld on a previously filed Form 945, check the box on line 1 and pay any additional amount you owe by the time you file Form 945-X. For details on how to make a payment, see the instructions for line 5, later.

Example—You underreported withheld income taxes.

On June 20, 2013, you discovered an error that results in additional tax on your 2012 Form 945. File Form 945-X by January 31, 2014, and pay the amount you owe by the time you file. See When Should You File Form 945-X, earlier. Do not attach Form 945-X to your 2013 Form 945.

If you overreported the tax.

If you overreported the tax actually withheld on a previously filed Form 945, you may choose one of the following options.

  • Use the adjustment process. Check the box on line 1 to apply any credit (negative amount) from line 5 to Form 945 for the year during which you file Form 945-X.

  • Use the claim process. Check the box on line 2 to file a claim on Form 945-X requesting a refund or abatement of the amount shown on line 5.

To ensure that the IRS has enough time to process a credit for an overreporting adjustment in the year during which you file Form 945-X, you are encouraged to file Form 945-X correcting the overreported amount in the first 11 months of a year. For example, if you discover an overreported amount in December, you may want to file Form 945-X during the first 11 months of the next year. This should ensure that the IRS will have enough time to process Form 945-X so the credit will be posted before you file Form 945, thus avoiding an erroneous balance due notice from the IRS. See the example below.

Example—You want your overreported tax applied as a credit to Form 945.

On December 18, 2014, you discover you overreported your tax on your 2013 Form 945 and want to choose the adjustment process. To allow the IRS enough time to process the credit, you file Form 945-X on January 2, 2015, and take the credit on your 2015 Form 945.


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