Backup withholding is a federal income tax withholding requirement that applies to certain payments made to payees who may not be subject to withholding. The purpose of backup withholding is to ensure that the IRS receives tax on income that is not subject to withholding or that is subject to withholding at a rate lower than the backup withholding rate.
The backup withholding rate is currently 28%. This means that a payer must withhold 28% of a payment made to …
