Specific Instructions:

Part 1: Select ONLY One Process

Because Form 945-X may be used to file either an adjusted return of withheld federal income tax or a claim for refund or abatement, you must check one box on either line 1 or line 2. Do not check both boxes.

1. Adjusted Return of Withheld Federal Income Tax

Check the box on line 1 if you are correcting underreported amounts or overreported amounts and you would like to use the adjustment process to correct the errors.

If you are correcting both underreported amounts and overreported amounts on this form, you must check this box. If you check this box, any negative amount shown on line 5 will be applied as a credit (tax deposit) to your Form 945 for the year in which you are filing this form. See Example—You want your overreported tax applied as a credit to Form 945 above.

If you owe tax.   Pay the amount shown on line 5 by the time you file Form 945-X. Generally, you will not be charged interest if you file on time, pay on time, enter the date you discovered the error, and explain the correction on line 7.

If you have a credit.   You overreported withheld federal income tax (you have a negative amount on line 5) and want the IRS to apply the credit to Form 945 for the year during which you filed Form 945-X. The IRS will apply your credit on the first day of that year. However, the credit you show on line 5 of Form 945-X may not be fully available on your Form 945 if the IRS corrects it during processing or you owe other taxes, penalties, or interest. The IRS will notify you if your claimed credit changes or if the amount available as a credit on Form 945 was reduced because of unpaid taxes, penalties, or interest.

  
Do not check the box on line 1 if you are correcting overreported amounts and the period of limitations on credit or refund for Form 945 will expire within 90 days of the date you file Form 945-X. Instead, check the box on line 2. See Is There a Deadline for Filing Form 945-X, earlier.

2. Claim

Check the box on line 2 to use the claim process if you are correcting overreported amounts only and you are claiming a refund or abatement for the negative amount (credit) shown on line 5. Do not check this box if you are correcting any underreported amounts on this form.

You must check the box on line 2 if you have a credit and the period of limitations on credit or refund for Form 945 will expire within 90 days of the date you file Form 945-X. See Is There a Deadline for Filing Form 945-X, earlier.

The IRS usually processes claims shortly after they are filed. IRS will notify you if your claim is denied, accepted as filed, or selected to be examined. See Pub. 556, Examination of Returns, Appeal Rights, and Claims for Refund, for more information.

Unless the IRS corrects Form 945-X during processing or you owe other taxes, penalties, or interest, IRS will refund the amount shown on line 5, plus any interest that applies.

Part 2: Enter the Corrections for the Calendar Year You Are Correcting

What Amounts Should You Report in Part 2?

In columns 1 and 2 of lines 3 and 4, show amounts for all of your payees, not just for those payees whose amounts you are correcting.

If a correction that you report in column 3 includes both underreported and overreported amounts (see the instructions for line 6), give us details for each error on line 7.

You may correct federal income tax withholding errors for prior years if the amounts shown on Form 945 do not agree with the amounts you actually withheld, that is, an administrative error. See section 13 of Pub. 15 (Circular E) for more information about administrative errors.

If you previously adjusted or amended Form 945 using Form 945-X or because of an IRS examination change, show amounts in column 2 that include those previously reported corrections.

3. Federal Income Tax Withheld

If you are correcting the federal income tax withheld you reported on Form 945, line 1, enter the total corrected amount for all payees in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.

line 3 (column 1)      
-line 3 (column 2)      
line 3 (column 3)   If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Example—Federal income tax withheld increased.

You reported $9,000 as federal income tax withheld on line 1 of your 2012 Form 945. In July of 2013, you discovered that you had overlooked $1,000 in federal income tax actually withheld from one of your payees. To correct the error, figure the difference on Form 945-X as shown.

Column 1 (corrected amount) 10,000.00  
Column 2 (Form 945, line 1) - 9,000.00  
Column 3 (difference) 1,000.00  

Example—Federal income tax withheld decreased.

You reported $9,600 as federal income tax withheld on line 1 of your 2012 Form 945. In December of 2013, you discovered that you actually withheld $6,900 but reported the higher amount due to a typographical (administrative) error. To correct the error, figure the difference on Form 945-X as shown.

Column 1 (corrected amount) 6,900.00  
Column 2 (Form 945, line 1) - 9,600.00  
Column 3 (difference) -2,700.00  

Example—Failure to withhold income tax when required.

You were required to withhold $400 of federal income tax from a new payee in December of 2012 but withheld nothing. You discovered the error on March 15, 2013. You cannot file Form 945-X to correct your 2012 Form 945 because the error involves a previous year and the amount previously reported for the new payee (zero) represents the actual amount withheld from the new payee during 2012.

Example—Administrative error.

You had three payees. In 2012, you withheld $1,000 of federal income tax from payee A, $2,000 from payee B, and $6,000 from payee C. The total amount of federal income tax you withheld was $9,000. You mistakenly reported $6,000 on line 1 of your 2012 Form 945. You discovered the error on March 15, 2013. This is an example of an administrative error that may be corrected in a later calendar year because the amount actually withheld from payees differs from the amount reported on Form 945. Use Form 945-X to correct the error. Enter $9,000 in column 1 of line 3 and $6,000 in column 2 of line 3. Subtract the amount in column 2 from the amount in column 1.

Column 1 (corrected amount) 9,000.00  
Column 2 (Form 945, line 1) -6,000.00  
Column 3 (difference) 3,000.00  

Be sure to explain the reasons for this correction on line 7.

4. Backup Withholding

If you are correcting the backup withholding of federal income tax you reported on Form 945, line 2, enter the total corrected amount in column 1. In column 2, enter the amount you originally reported or as previously corrected. In column 3, enter the difference between columns 1 and 2.

line 4 (column 1)      
-line 4 (column 2)      
line 4 (column 3)   If the amount in column 2 is larger than the amount in column 1, use a minus sign in column 3.

Read the instructions for line 3 for more information on completing line 4. For correction purposes, there is no distinction between federal income tax withheld from pensions, annuities, IRAs, gambling winnings, etc. and backup withholding.

5. Total

Combine the amounts from lines 3 and 4 of column 3. Enter the result on line 5.

Your credit.   If the amount entered on line 5 is less than zero, for example, “-115.00,” you have a credit because you overreported withheld federal income tax.
  • If you checked the box on line 1, include this amount on line 4 (“Total deposits”) of Form 945 for the year during which you file Form 945-X. Do not make changes to your Monthly Summary of Federal Tax Liability on Form 945 or on Form 945-A. The amounts reported on the record should reflect your actual tax liability for the period.

  • If you checked the box on line 2, you are filing a claim for refund or abatement of the amount shown.

  If your credit is less than $1, we will send a refund or apply it only if you ask us in writing to do so.

Amount you owe.   If the amount on line 5 is a positive number, you must pay the amount you owe by the time you file Form 945-X. You may not use any credit that you show on another Form 945-X to pay for the amount you owe, even if you filed for the amount you owe and the credit at the same time.

Payment Methods.

You may pay the amount you owe on line 5 electronically using the Electronic Federal Tax Payment System (EFTPS), by credit or debit card, or by check or money order.

  • The preferred method of payment is EFTPS. For information, visit www.eftps.gov, call EFTPS Customer Service at 1-800-555-4477 or 1-800-733-4829 (TDD), or see Pub. 966, Electronic Federal Tax Payment System: A Guide To Getting Started.

  • For more information on paying by credit or debit card, visit the IRS website at www.irs.gov/e-pay.

  • If you pay by check or money order, make it payable to “United States Treasury.” On your check or money order, be sure to write your EIN, “Form 945-X,” and the year corrected.

You do not have to pay if the amount you owe is less than $1.

Previously assessed FTD penalty.

If line 5 reflects overreported tax and the IRS previously assessed a failure-to-deposit (FTD) penalty, you may be able to reduce the penalty. For more information, see the Form 945-A instructions.

Part 3: Explain Your Corrections for the Calendar Year You Are Correcting

6. Correcting Both Underreported and Overreported Amounts

Check the box on line 6 if any corrections you entered on line 3 or line 4 in column 3 reflect both underreported and overreported amounts.

Example.

If you had an increase to withheld income tax of $15,000 for payee A and a decrease to withheld income tax of $5,000 for payee B, you would enter $10,000 on line 3, column 3. That $10,000 represents the net change from corrections.

On line 7, you must explain the reason for both the $15,000 increase and the $5,000 decrease.

7. Explain Your Corrections

Treasury regulations require you to explain in detail the grounds and facts relied upon to support each correction. On line 7, describe in detail each correction you entered in column 3 on lines 3 and 4. If you need more space, attach additional sheets, but be sure to write your name, EIN, Form 945-X, and calendar year on the top of each sheet.

You must describe the events that caused the underreported or overreported withheld income tax or backup withholding. An explanation such as “withheld income tax was overstated” is insufficient and may delay processing your Form 945-X because the IRS may need to ask for a more complete explanation.

Provide the following information in your explanation for each error you are correcting.

  • Form 945-X line number(s) affected.

  • Date you discovered the error.

  • Difference (amount of the error).

  • Cause of the error.

You may report the information in paragraph form. The following paragraph is an example.

The $1,000 difference shown in column 3 of line 3 was discovered on May 13, 2013, during an internal audit. Due to a typographical error, we reported $11,000 as withheld income tax on Form 945 instead of the $10,000 actually withheld from payees. This correction removes the $1,000 that was overreported.

Part 4: Sign Here

You must fill out both pages of Form 945-X and sign it on page 2. If you do not sign, processing of Form 945-X will be delayed.

Who must sign the Form 945-X?   Form 945-X must be signed by a person who is authorized to sign for the type of business entity.
  • Sole proprietorship—The individual who owns the business.

  • Corporation (including a limited liability company (LLC) treated as a corporation)—The president, vice president, or other principal officer duly authorized to act.

  • Partnership (including an LLC treated as a partnership) or unincorporated organization—A responsible and duly authorized partner, member, or officer having knowledge of its affairs.

  • Single member LLC treated as a disregarded entity for federal income tax purposes—The owner of the LLC or principal officer duly authorized to act.

  • Trust or estate—The fiduciary.

  A duly authorized agent of the taxpayer may also sign Form 945-X if a valid power of attorney has been filed.

Alternative signature method.   Corporate officers or duly authorized agents may sign Form 945-X by rubber stamp, mechanical device, or computer software program. For details and required documentation, see Rev. Proc. 2005-39. You can find Rev. Proc. 2005-39, 2005-28 I.R.B. 82, at www.irs.gov/irb/2005-28_IRB/ar16.html.

Paid Preparer Use Only

A paid preparer must sign Form 945-X and enter the information requested in the Paid Preparer Use Only section of Part 4 if the preparer was paid to prepare Form 945-X and is not an employee of the filing entity. Paid Preparers must sign paper returns with a manual signature. The preparer must give you a copy of the return in addition to the copy to be filed with the IRS.

If you are a paid preparer, enter your Preparer Tax Identification Number (PTIN) in the space provided. Include your complete address. If you work for a firm, enter the firm's name and the EIN of the firm. You can apply for a PTIN online or by filing Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application and Renewal. For more information about applying for a PTIN online, visit the IRS website at www.irs.gov/ptin. You cannot use your PTIN in place of the EIN of the tax preparation firm.

Generally, you are not required to complete this section if you are filing the return as a reporting agent and have a valid Form 8655, Reporting Agent Authorization, on file with the IRS. However, a reporting agent must complete this section if the reporting agent offered legal advice, for example, advising the client whether federal income tax withholding is required on certain payments.

How Can You Order Forms, Instructions, and Publications from the IRS?

Visit the IRS website at www.irs.gov/formspubs.

Call the IRS at 1-800-TAX-FORM (1-800-829-3676).

Additional Information

You may find the following products helpful when using Form 945-X.

  • Form W-4P, Withholding Certificate for Pension or Annuity Payments

  • Form W-4V, Voluntary Withholding Request

  • Form W-9, Request for Taxpayer Identification Number and Certification

  • Instructions for Forms W-2G and 5754

  • Instructions for Form 843

  • Instructions for Form 945

  • Form 945-A, Annual Record of Federal Tax Liability

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

  • Pub. 575, Pension and Annuity Income

  • Pub. 966, Electronic Federal Tax Payment System: A Guide To Getting Started

  • Pub. 1281, Backup Withholding for Missing and Incorrect Name/TIN(s)


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