# Backup withholding

> Backup withholding — Federal income tax a payer must withhold at 24% from reportable payments — contractor fees, interest, dividends, card settlements — when the payee has not given a correct TIN or the IRS has notified the payer to withhold. Deposited and reported on Form 945.

Source: https://lopifi.com/glossary/backup-withholding
Part of: Lopifi — US GAAP books on autopilot, reviewed by a CPA (https://lopifi.com)

---

**What is backup withholding?** In accounting, backup withholding means federal income tax a payer must withhold at 24% from reportable payments — contractor fees, interest, dividends, card settlements — when the payee has not given a correct TIN or the IRS has notified the payer to withhold. Deposited and reported on Form 945.

## Words this system refuses for it

- payroll withholding

- **Category:** Tax
- **Specified in:** [Lexicon](https://lopifi.com/md/docs/domain/11-lexicon)
- **Related:** payee, payer