Updated October 24, 2026. Quick answer: IRS Tax Topic 307 explains backup withholding. It says a payer must withhold at a flat 24% rate when you don’t give your TIN in the required manner, when the IRS notifies the payer that your TIN is incorrect, or in two other listed situations. It can apply to most payments reported on Form 1099.
Quick reference
| Item | What the IRS topic says |
|---|---|
| What it is | “backup withholding requires a payer to withhold tax from payments not otherwise subject to withholding.” |
| Rate | “the payer must withhold at a flat 24% rate when:” |
| TIN request form | “the bank or business will give you Form W-9, Request for Taxpayer Identification Number and Certification or a similar form.” |
| Where it shows up | “The Form 1099 will also report any amounts withheld under the backup withholding rules.” |
| Claiming the credit | “report the amount as federal income tax withheld on your income tax return for the year you received the income.” |
What backup withholding is
The IRS topic says “When it applies, backup withholding requires a payer to withhold tax from payments not otherwise subject to withholding.” It also says “You may be subject to backup withholding if you fail to provide a correct taxpayer identification number (TIN) when required or if you fail to report interest, dividend, or patronage dividend income.”
On reporting, it says “Banks or other businesses that make certain types of payments to you must file an information return with the IRS on Form 1099 showing payments that you received during the year.” On this site, Form W-9 covers the TIN request form.
Which payments and which triggers
The IRS topic says “Backup withholding can apply to most kinds of payments reported on Form 1099, including:” The list includes “Interest payments (Form 1099-INT);” “Dividends (Form 1099-DIV);” and “Commissions, fees, or other payments for work performed as an independent contractor (Form 1099-NEC);”
The topic says “You may be subject to backup withholding and the payer must withhold at a flat 24% rate when:” and lists four situations. The first is “you don’t give the payer your TIN in the required manner;” The second is “the IRS notifies the payer that the TIN you gave is incorrect;” The last is “you fail to certify that you’re not subject to backup withholding for underreporting of interest and dividends.”
Stopping it and getting credit
On a payer notice about your TIN, the IRS topic says “you can usually prevent backup withholding from starting or stop it once it has begun by giving the payer your correct name and TIN and certifying that the TIN you give is correct.” It adds “If you receive a second notice from that payer, you’ll need to provide verification of your correct name and TIN.”
For credit, the topic says “If your Form 1099 shows an amount withheld under the backup withholding rules, report the amount as federal income tax withheld on your income tax return for the year you received the income.” Related boxes are covered on the Form 1099-DIV box 4 page and the Form 1099-INT boxes 4 to 7 page.
Where this comes from
This page describes the IRS page titled Topic no. 307, Backup withholding, as served on irs.gov on October 24, 2026. The IRS page shows that it was last reviewed or updated on 24 Sep 2026. The IRS can change a topic after we read it, and the IRS page controls. General information, not tax or legal advice.
Common mistakes
- Thinking only interest is covered. The topic says it “can apply to most kinds of payments reported on Form 1099”.
- Assuming the rate varies by payer. The topic says “a flat 24% rate”.
- Treating the withheld amount as lost. The topic says to “report the amount as federal income tax withheld on your income tax return”.
- Expecting a partnership or S corporation to claim it. The topic says “any backup withholding can only be claimed by the partners and shareholders.”
Related: IRS tax topics by number, Form W-9, Form 1099-DIV box 4, backup withholding, Form 1099-INT boxes 4 to 7, Form 1099-PATR box 4, Form 1099-K box 4, and Form 1040 line 25, federal income tax withheld.
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Answer againSources
- IRS, Topic no. 307, Backup withholding (irs.gov): https://www.irs.gov/taxtopics/tc307
- IRS, Tax topics index (irs.gov): https://www.irs.gov/taxtopics
Read from the IRS pages linked above on October 24, 2026. General information, not tax or legal advice. The IRS topic page and the instructions for your own form control, and your own facts decide the outcome.