Withholding

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Withholding

Used in the context of securities, the illegal practice of a public offering participant keeping some shares in a private account or with a family member, employee, or dealer to profit from the higher market price of a hot issue.
Used in the context of taxes, the withholding by an employer of a certain amount of an employee's income in order to cover the employee's tax liability. Also used to refer to the withholding by corporations and financial institutions of a flat 10% of interest and dividend payments due to security holders.

Withholding

The act or practice of not giving a certain percentage of money that otherwise belongs to a person. Withholding must occur in accordance with appropriate laws and may not be arbitrary. Withholding is most common in taxes, in which an employer retains a certain percentage of an employee's wages or salary and gives it to the IRS instead of the employee. Likewise, a manual rollover to an IRA is subject to a 20% withholding. Courts may order withholding for reasons such as child support or alimony. See also: Overwithholding.

withholding

1. The holding back of a portion of wages, dividends, interest, pension payments, or various other sources of income for payment of taxes to the U.S. Treasury. See also backup withholding.
2. The illegal holding back of a portion of securities allocated as part of a new issue to a member of an underwriting syndicate. The underwriter may wish to keep the securities or resell them to a designated party so as to profit from an expected price rise soon after the issue has been offered to the public.

Withholding.

Withholding is the amount that employers subtract from their employees' gross pay for a variety of taxes and benefits, including Social Security and Medicare taxes, federal and state income taxes, health insurance premiums, retirement savings, education savings, or flexible spending plan contributions, union dues, or prepaid transportation.

Contributions to tax-deferred savings plans are withheld from your pretax income, as are amounts you put into tax-free flexible spending and prepaid transportation accounts. Those amounts reduce the taxable salary that your employer reports to the IRS.

References in periodicals archive ?
A withholding agent usually must withhold at the time of payment [Treasury Regulations section 1441.
Managed FFS has incentives similar to those of FFS, but with modest checks and balances in the form of a withhold.
Several aspects of the EPA executive privilege case point to the conclusion that the quest to withhold the documents had to start in some such self-serving desire.
The withholding agent and the foreign payee are primarily liable for any failure to withhold tax due on amounts paid to a foreign payee.
1445-2(d)(3) (ii) and (iii) to withhold the alternative amount or application for and receipt of a withholding certificate, the transferee must withhold 10% of the amount realized from the transaction pursuant to Sec.
A withholding agent is a person who is required to deduct and withhold taxes under the provisions of Secs.
trade or business, (14) or payments of portfolio interest paid to foreign persons, unless the person required to withhold knows or has reason to know that the interest is not portfolio interest.
Form W-2, which must be furnished to any employee who received more than $600 in wages, even though domestic employers may not have to pay and withhold FICA tax for wages less than $1,000.
Therefore, Nortem intends to withhold from the final liquidating distribution at the general Dutch tax withholding rate (25% of the Dutch "dividend" amount) with respect to all shareholders; after the liquidating distribution, a shareholder eligible for treaty benefits will be entitled to file for a refund of amounts withheld in excess of the applicable treaty rates with the Dutch tax authorities in The Netherlands.
person that makes FDAP payments to NRAs is required to withhold the proper tax and remit it to the IRS.
Where the service provider demonstrates that the required 15-percent withholding tax will exceed its ultimate Canadian tax liability, CCRA may authorize a reduction in the amount that the Canadian payer is required to withhold.
Employers (who can be individuals or businesses) must withhold two types of federal payroll taxes from employees' wages: federal income taxes and Federal Insurance Contributions Act (FICA) taxes.