1999 Department of the Treasury Internal Revenue Service Instructions for Form 945 Annual Return of Withheld Federal Income Tax Section references are to the Internal Revenue Code unless otherwise noted. Changes To Note New electronic deposit requirement.   Beginning January 1, 2000, the following changes have been made to the electronic deposit requirement: l  The threshold that determines whether you must use the Electronic Federal Tax Payment System (EFTPS) has been increased from $50,000 to $200,000. l  All Federal tax deposits (such as deposits for employment tax, excise tax, and corporate income tax) made during a calendar year are combined to determine whether you exceeded the $200,000 threshold. If the total of your Federal tax deposits made in 1998 exceeded $200,000, you must use EFTPS beginning January 1, 2000. l  Participation in EFTPS is voluntary if your deposits do not exceed the new $200,000 threshold, even if you were required to electronically deposit under the previous $50,000 threshold. However, businesses that exceed the new $200,000 threshold must continue to use EFTPS in all later years. l  The waiver of the penalty for failure to use EFTPS, scheduled to expire on July 1, 1999, has been extended to January 1, 2000, for taxpayers whose total Federal tax deposits in 1998 did not exceed the $200,000 threshold. However, taxpayers will remain liable for penalties if a deposit is not made in the required manner. For more information, see Circular E, Employer's Tax Guide (Pub.   15). Threshold for deposit requirement increased from $500 to $1,000.   Beginning with your 1999 Form 945, if your total taxes for the year (line 4) are less than $1,000, you are not required to make deposits. You may pay the taxes with your Form 945. Photographs of Missing Children The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in instructions on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. General Instructions Purpose of form.   Use Form 945 to report income tax withheld from nonpayroll payments. Nonpayroll payments include the following: l  Pensions, annuities, and IRAs l  Military retirement l  Gambling winnings l  Indian gaming profits l  Voluntary withholding on certain government payments l  Backup withholding Report all income tax withholding from nonpayroll payments or distributions on one Form 945. Do not file more than one Form 945 for each calendar year. All income tax withholding reported on Forms 1099 (e.g., Form 1099-R or 1099-MISC) or Form W-2G must be reported on Form 945. Do not report income tax withholding on wages on Form 945. All employment taxes and income tax withholding reported on Form W-2 must be reported on Form 941 (or Form 943 for agricultural employees, Schedule H (Form 1040) for household employees, or Form CT-1 for railroad employees). Because distributions to participants from nonqualified pension plans and some other deferred compensation arrangements are treated as wages and are reported on Form W-2, income tax withheld from them must be reported on Form 941, not Form 945. See Circular E for more information. Related publications.   Circular E explains the rules for withholding, depositing, and reporting Federal income tax. Pub. 15-A, Employer's Supplemental Tax Guide, includes information on income tax withholding from pensions and annuities and Indian gaming profits. For information on withholding on gambling winnings, see the 2000 Instructions for Forms W-2G and 5754. These publications are available on the IRS's Internet Web Site at www.irs.gov or by calling 1-800-TAX-FORM (1-800-829-3676). Who must file.   If you withhold income tax (including backup withholding) from nonpayroll payments, you must file Form 945. You are not required to file Form 945 for those years in which you do not have a nonpayroll tax liability. Do not report on Form 945 withholding that is required to be reported on Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons. When to file.   For 1999, file Form 945 by January 31, 2000. However, if you made deposits on time in full payment of the taxes for the year, you may file the return by February 10. Your return will be considered timely filed if it is properly addressed and mailed First-Class or sent by an IRS designated delivery service on or before the due date. See Circular E for more information on IRS designated delivery services. If the due date for filing a return falls on a Saturday, Sunday, or legal holiday, you may file the return on the next business day. Where to file.   In the list below, find the location of your legal residence, principal place of business, office, or agency. Send your return to the Internal Revenue Service at the address listed for your location. No street address is needed. Note:   Where you file depends on whether or not you are including a payment. Cat. No. 20534D