Backup withholding is a mandatory withholding of federal income tax that is taken from certain payments. The purpose of backup withholding is to ensure that taxpayers pay the correct amount of tax on their income. Backup withholding is mainly used to collect taxes from payers who are not subject to withholding, such as independent contractors.
The Internal Revenue Service (IRS) requires payers to withhold federal income tax from certain payments to taxpayers who are not subject to withholding. These payments …
