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 ?
If the IRS issues the requested certificate, it entitles the transferee to withhold a lesser amount, or exempts the sale from withholding altogether, depending on the specific circumstances of the foreclosure sale.
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.
Provided employers with consistent guidelines on how to withhold income tax from employee wages;
section] 54A:7-1(a) (employers maintaining an office or transacting business in the state and making a wage payment subject to New Jersey personal income tax to a resident or nonresident individual must withhold taxes).
83(h) would eliminate a special rule that requires an employer to deduct and withhold income tax as a prerequisite for claiming a deduction for property transferred to an employee in connection with the performance of services.
The Service could then notify the employer to withhold, using a maximum number of exemptions for an employee.