Backup withholding can apply to payments such as:
- Interest payments
- Dividends
- Patronage dividends, but only if at least half of the payment is in money
- Rents, profits or other income
- Commissions, fees or other payments for work performed as an independent contractor
- Payments by brokers and barter exchange transactions
- Certain portions of payments by fishing boat operators
- Payment card and third-party network transactions
- Royalty payments
- Gambling winnings that aren't subject to regular gambling withholding
- Taxable grants and agriculture payments
- Fail to give a taxpayer identification number to the payer
- Give an incorrect TIN
- Supply a TIN in an improper manner
- Under report interest or dividends on their income tax return
- Fail to certify that they’re not subject to backup withholding for under reporting of interest and dividends
A TIN can be a:
- Social Security number
- Employer identification number
- Individual taxpayer identification number
- Adoption taxpayer identification number
More information:
The Backup Withholding page
Publication 505, Tax Withholding and Estimated Tax
Publication 1335, Backup Withholding Questions and Answers
Form 945, Annual Return of Withheld Federal Income Tax
Publication 15, Employer’s Tax Guide
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