What is backup withholding?

Backup withholding is a flat IRS withholding the payer must apply to certain reportable payments when the payee fails to give a correct taxpayer identification number (TIN) or the IRS notifies the payer of a name/TIN mismatch. It ensures tax is collected on income that might otherwise go unreported.

The backup withholding rate is a flat 24% of the gross reportable payment, set by the Tax Cuts and Jobs Act. It does not vary with the payee's income or tax bracket; the same 24% applies to every dollar of the affected payment.

Which payments are subject to it?

Backup withholding applies to many 1099-reportable payments, including non-employee compensation (1099-NEC), rents and royalties (1099-MISC), interest (1099-INT), dividends and broker proceeds. Wages reported on a W-2 are not subject to backup withholding.

When is it triggered?

The two main triggers are a missing or obviously incorrect TIN on the payee's Form W-9, and a C-notice or B-notice from the IRS about a name/TIN mismatch or under-reported interest and dividends. Once notified, the payer must withhold until the issue is resolved.

Is my data sent anywhere?

No. The whole calculation runs in your browser. None of your figures leave your device.

US Backup Withholding Calculator

Backup withholding is a flat IRS withholding that payers must apply to certain 1099-reportable payments when a payee’s taxpayer identification number (TIN) is missing or incorrect. This free calculator applies the 24% rate and shows the amount to withhold and the net to pay.

How it works

The math is a simple flat rate on the gross reportable payment:

withheld = gross x 24%      (only if backup withholding applies)
net paid = gross - withheld

The 24% rate is fixed by statute and does not depend on the payee’s income or bracket. If backup withholding does not apply (a valid TIN is on file and no IRS notice exists), nothing is withheld and the payee receives the full gross.

Example

You owe a contractor $5,000 on a 1099-NEC but their Form W-9 has a missing TIN, so backup withholding applies. Withheld = 5,000 × 24% = $1,200, and the contractor receives $3,800. You remit the $1,200 to the IRS and report it on Form 945. Everything runs locally; nothing leaves your browser.