What is backup withholding?
Backup withholding is a type of tax withholding on specific types of income for federal tax purposes. Backup withholding will not apply to you if:
- you are exempt from backup withholding, or
- you have not been notified by the Internal Revenue Service that you are subject to backup withholding as a result of a failure to report all interest or dividends, or
- the IRS has notified you that you are no longer subject to backup withholding.