What Is A Backup Withholding?
A backup withholding is a type of tax withholding that is used to ensure that tax is paid on certain types of payments, including interest, dividends, and rents. Backup withholding is generally required when the payee fails to provide their taxpayer identification number (TIN) to the payer. The backup withholding rate is currently 28%, which is the same as the federal income tax rate.
There are a few exceptions to the backup withholding requirement, including …
