What This Notice Means

You're no longer subject to backup withholding. The IRS has told your payers of interest, dividends, and patronage dividends to stop withholding.

This is good news. It means the issue that triggered backup withholding has been resolved.

What to Do

  • Check that each payer of your interest or dividend income got the IRS's instruction to stop.
  • If a payer didn't, give them a copy of this notice by December 31.
  • Payers will stop withholding within 30 days, as long as you aren't subject to backup withholding for some other reason.
  • Keep this notice for your records.

The fastest way to check is to look at your next statement from each bank or brokerage and see whether federal tax is still being withheld from interest or dividends.

About Backup Withholding

Backup withholding is a deduction from certain payments, mostly interest and dividends, that payers must take when the IRS instructs them to. The current rate is 24%, and it can change with the tax laws. It continues until the IRS tells the payer to stop or the payer receives written certification from the IRS that you're no longer subject to it. This notice is that certification.

Don't Forget the Withholding Already Taken

Any backup withholding taken from your payments during the year counts as tax withheld. Make sure it shows up on your return.

Stay Off the List

  • File your return on time.
  • Report all interest and dividend income.
  • Pay all taxes due.

If you have other IRS issues to clean up, call us at (813) 229-7100.