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What this notice is about
You no longer need to withhold taxes on interest, dividends and patronage dividends you pay to the taxpayers listed on your notice. The taxpayers listed are no longer subject to backup withholding.
What you need to do
- Stop backup withholding within 30 days of receiving your notice or by Jan 1st.
- Report your withholding on Form 945, Annual Return of Withheld Federal Income Tax.
- Protect payee (taxpayer) information or you could be subject to civil damages for unauthorized disclosure (Internal Revenue Code Section 7431).
You may want to
- Read about backup withholding.
- Review Publication 1335, Backup Withholding Questions and Answers PDF.
- Use IRS Online Account to check your payoff amount, payment history, or to view transcripts.
Frequently asked questions
What is backup withholding? (updated Mar. 25, 2026)
Backup withholding is withholding on interest and dividend income that a payer will withhold when we instruct them to do so.
What is the backup withholding rate? (updated Mar. 25, 2026)
Currently, it’s 24%. It can increase or decrease with tax laws.
How long will the payee be subject to backup withholding? (updated Mar. 25, 2026)
Until we instruct the payer to stop, or until the payee provides written certification from us to the payer that they’re no longer subject to backup withholding.
Need help?
- You can authorize someone to contact the IRS on your behalf.
- See if you qualify for help from a Low Income Taxpayer Clinic.
- If you can’t find what you need online, call the IRS number on your notice or letter. If you didn’t receive a letter or notice, use telephone assistance.
- If you can't resolve the penalty on your own, contact Taxpayer Advocate Service, an independent organization within IRS.