Call us: 1 888 858 8539  |   Questions?  |   Contact Us

Backup Withholdings

Here are some payments subject to backup withholding

  • Interest payments
  • Dividends
  • Payment card and third-party network transactions
  • Patronage dividends, but only if at least half the payment is in money
  • Rents, profits, or other gains
  • Commissions, fees, or other payments for work done as an independent contractor
  • Payments by brokers
  • Barter exchanges
  • Payments by fishing boat operators, but only the part that is paid in actual money and that represents a share of the proceeds of the catch
  • Royalty payments
  • Gambling winnings

Here are some situations when the payer must take out backup withholding

  • If a taxpayer identification number is missing. A taxpayer identification number specifically identifies the taxpayer. This includes number like a Social Security number and an individual taxpayer identification number.
  • If the name provided does not match the name registered with the IRSfor a specific TIN, taxpayers should make sure that the payer has their correct TIN.

For more information go to the IRS website.

No Comments Yet.

Leave a comment