Backup withholding is a tax withholding method that is used to ensure that tax is paid on certain types of payments, such as interest, dividends, and rents. The backup withholding rate is currently 28 percent.
There are a number of exceptions to the backup withholding requirement, including payments made to foreign persons and payments for services performed by a nonresident alien individual. One of the most common exceptions is payments made to a U.S. person who is not subject to …
