Join the waitlist

Backup Withholding Calculator (24%)

What does this come to under the current IRS rules?

Backup withholding at 24% on a reportable payment when the payee TIN is missing or wrong, or the IRS sent a notice.

  • Runs in your browser
  • Nothing stored or sent
  • Free, no sign-up
Your figures
Example figuresIllustrative only. Type over them with your own.
Backup withholding
$1,200
24% on reportable payments
Net payment to payee
$3,800
Rate applied
24.00%
Drawn to one scale
Backup withholding$1,200
Net payment to payee$3,800
All results
MeasureResult
Backup withholding$1,200
Net payment to payee$3,800
Rate applied24.00%
How this was worked out
Work shownrecomputed as you type
Backup withholding = 24% x payment when the payee fails to give a correct TIN or the IRS orders it
Payee claims the amount withheld as a credit on the return

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Backup withholding = 24% x payment when the payee fails to give a correct TIN or the IRS orders it
  • Payee claims the amount withheld as a credit on the return

How it works

The IRS backup withholding page states that payers withhold at the current rate of 24% when the payee fails to provide a correct taxpayer identification number or the IRS notifies the payer that the payee underreported interest or dividends. It applies to many payments reported on Forms 1099 and W-2G, such as interest, dividends, attorney fees, royalties and gambling winnings.

Unemployment compensation and retirement account distributions are not subject to backup withholding. The payee reports the withheld amount shown on the Form 1099 or W-2G as a payment on the return for the year of the income.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

What triggers it?

A missing or wrong TIN (B notice) or an IRS notice that you underreported interest or dividends (C notice).

Is backup withholding a penalty?

No. It is a prepayment of tax credited on your return.

Does it apply to wages?

No. Wages use regular payroll withholding.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

Related audit calculators

CalculatorNonresident Withholding Calculator: 30% or Treaty Rate on FDAP IncomeChapter 3 withholding on U.S. source FDAP income paid to a foreign person, and the agent's shortfall if under-withheld.CalculatorFBAR and Form 8938 Filing Threshold CheckWhether foreign account and asset values trigger FinCEN Form 114 and Form 8938, by filing status and residence.CalculatorEmployer Adoption Assistance Exclusion Calculator (2026 $17,670)Employer adoption benefits excluded from wages for 2026 after the $265,080 to $305,080 MAGI phase-out.
For US CPA firms

Join the CORAA waitlist

CORAA AI drafts audit working papers from your client’s QuickBooks books and does the first pass: lead schedules, tie-out, memos, draft notes and letters. CORAA Network reviewers clear every finding. Your firm reviews and signs.

  • First audit free, so you can judge the quality on a real file
  • Flat fee by entity size; messy books included
  • We work only with CPA firms, never their clients
See how it works →

* required