Form 945

Who files Form 945, and who doesn’t

The filing rule turns on withholding, not on payments. The instructions say: “If you withhold or are required to withhold federal income tax (including backup withholding) from nonpayroll payments, you must file Form 945.” They also say the reverse: “You don’t have to file Form 945 for those years in which you don’t have a nonpayroll tax liability.”

So a Stripe Connect platform that collects a Form W-9 from every US contractor before the first transfer, and never has to withhold, usually has no Form 945 at all. It still files its Forms 1099-NEC. The return appears in the first year a contractor is paid without a TIN on file, or stays on withholding after a B notice goes unanswered.

The phrase “required to withhold” matters. If you should have backed up 24% and didn’t, the liability exists anyway, and the instructions treat it as reportable on line 2 the same as tax you actually held back. Form 945 is not a record of what you chose to withhold. It is a record of what you owed.

Two kinds of withholding stay off the form. Wage withholding reported on Form W-2 goes on Form 941, 943 or 944. Withholding “required to be reported on Form 1042” goes on Form 1042, which is the return for payments to foreign persons documented on a Form W-8 or Form 8233.

What goes on each line

Form 945 is short, and a contractor-paying business touches only a few of its lines.

Line 1, federal income tax withheld, is for pensions, annuities, IRA distributions, military retirement, Indian gaming profits and regular gambling withholding, plus voluntary withholding on certain government payments and ANC distributions. Most platforms leave it blank. Line 2 is backup withholding: the instructions say to “Enter any backup withholding that you withheld (or were required to withhold).” That is the line a Stripe Connect platform fills in.

Line 3 adds lines 1 and 2. If the total is $2,500 or more, it must equal the year’s liability on line 7m, or on line M of Form 945-A. Line 4 is everything you deposited for the year, including any overpayment applied from a Form 945-X or from the prior year’s return. The difference lands on line 5 as a balance due or on line 6a as an overpayment, never both, and the instructions add that you should generally have a balance due only if line 3 is under $2,500.

Line 7 is a month-by-month summary of liability, completed only by a monthly schedule depositor whose line 3 is $2,500 or more. Semiweekly depositors report the same detail on Form 945-A instead. Either way it records when the liability arose, not when you paid it: “This is a summary of your monthly tax liability, not a summary of deposits made.” The instructions tie the liability to the payment itself, which for a platform is the Stripe transfer you withheld from.

Deposits: the $2,500 line and the two schedules

Form 945 is filed once a year, but above a certain size the tax is deposited as you go.

If the year’s total is under $2,500, the instructions say you’re “not required to make deposits during the year.” You pay the balance with the return.

At $2,500 or more, you deposit by electronic funds transfer, through EFTPS, IRS Direct Pay or your IRS business tax account. Which schedule you follow is fixed before the year starts, from a lookback year two years back. For 2026, the instructions say you are a monthly schedule depositor if line 3 of your 2024 Form 945 was $50,000 or less, and a semiweekly schedule depositor if it was more. A platform that filed no Form 945 for 2024 had nothing on that line, so it starts 2026 on the monthly schedule.

Publication 15 gives the deadlines. A monthly schedule depositor deposits the tax on payments made during a month “by the 15th day of the following month.” A semiweekly schedule depositor deposits tax on payments made Wednesday through Friday by the following Wednesday, and on payments made Saturday through Tuesday by the following Friday. One override applies to both: a monthly depositor that accumulates $100,000 or more on any day switches to semiweekly the next day, for the rest of that year and the following one.

Keep Form 945 money separate. The instructions say not to combine Form 945 deposits with Form 941, 943, 944 or CT-1 deposits, and not to add the two together when deciding whether the $2,500 threshold applies, which schedule you follow, or whether the $100,000 rule is triggered. A platform with a large payroll can still be a small Form 945 filer.

A worked example: two contractors without a TIN

A platform that started in 2025 pays its US contractors through Stripe Connect. It filed no Form 945 for 2024, so for 2026 it is a monthly schedule depositor. Two contractors never return a Form W-9.

Contractor C earns 6,000 USD, paid by a transfer on March 10, 2026. The platform withholds 24%, or 1,440 USD, and transfers 4,560 USD. Contractor D earns 5,000 USD, paid on August 21, 2026. The platform withholds 1,200 USD and transfers 3,800 USD. Across the year, 11,000 USD was earned, 8,360 USD moved through Stripe, and 2,640 USD was withheld.

The year’s total of 2,640 USD is over the $2,500 line, so the platform deposits. The March liability is due by April 15, 2026, and the August liability by September 15, 2026, and both go in on time.

On the 2026 Form 945, line 2 and line 3 both show 2,640 USD. Line 4 shows 2,640 USD of deposits, so lines 5 and 6a are empty. Line 7 shows 1,440 USD for March and 1,200 USD for August, and line 7m totals 2,640 USD, matching line 3.

On the payee side, each contractor’s Form 1099-NEC shows the full amount earned, 6,000 USD and 5,000 USD, not what reached their Stripe balance, with 1,440 USD and 1,200 USD in box 4. The name and EIN on the Form 945 have to match the name and EIN on those 1099s.

Had only contractor C gone without a TIN, the year’s total would have been 1,440 USD. That is under $2,500, so no deposits are required, line 7 stays blank, and the 1,440 USD is paid with the return.

Due dates, corrections and penalties

Form 945 is an annual return filed early in the following year. For 2025, the instructions say “file Form 945 by February 2, 2026,” or by February 10, 2026, “if you made deposits on time in full payment of the taxes due for the year.” A due date that falls on a weekend or legal holiday moves to the next business day. The 2026 instructions will set the dates for 2026 returns.

The IRS encourages e-filing, and a paper return goes to an address that depends on whether you enclose a payment. A valid EIN is required: “If a valid EIN isn’t provided, the return won’t be accepted.”

Errors are fixed on Form 945-X, Adjusted Annual Return of Withheld Federal Income Tax or Claim for Refund, which can now be e-filed. You do not file a second Form 945.

The penalties are the reason to take a small return seriously. The instructions list penalties for filing late and for paying or depositing late, plus separate penalties for missing information returns such as Forms 1099-NEC. Withheld tax is trust fund money, and if it isn’t paid over, the trust fund recovery penalty can apply: “The penalty is 100% of the unpaid trust fund taxes,” and it can be assessed personally against anyone responsible for paying it who willfully failed to.