Backup Withholding Rate

Backup Withholding Rate

The percentage of dividends, interest and other investment income one must pay if one fails to properly file one's tax identification number. The IRS informs companies and persons who are subject to backup withholding; this ensures the companies and persons pay the appropriate amount in taxes.
References in periodicals archive ?
102-486), which was signed by President Bush on October 24, includes among its revenue-raising provisions several changes to the tax treatment of transportation benefits, expenses for extended travel away from home, and the backup withholding rate.
102-486 increases the backup withholding rate to 31 percent (from 20 percent), effective for all amounts paid after December 31, 1992.
Under the Jobs and Growth Tax Relief Reconciliation Act of 2003, federal backup withholding tax will be withheld at the applicable backup withholding rate in effect at the time the payment is made if the tax identification number is not properly certified.