Backup withholding Resident and nonresident withholding


Backup withholding is a type of income tax withheld on specific income types when a payee fails to:

  • Provide the payer a correct taxpayer identification number (TIN)
  • Certify exemption from backup withholding

Backup withholding:

When is backup withholding required

If the payer is required to withhold and remit backup withholding to the IRS, they are also required to withhold and remit with us, with certain limited exceptions.

Income subject to backup withholding

Backup withholding can apply to most payments reported on Forms 1099 and W-2G, including:

  • Rents
  • Royalties
  • Commissions
  • Non-employee compensation


Backup withholding requires a payer to deduct and withhold 7% of a reportable payment if the payee:

  • Does not provide a TIN
  • Provides an invalid TIN
  • Fails to certify they are not subject to backup withholding

Credit for backup withholding

If a payee had income tax withheld under the backup withholding rule, the payee must report the California backup withholding on their return for the year they received the income.


Certain payees are exempt, such as government entities and tax-exempt organizations. For a complete list, refer to IRS Form W-9.

Prevent backup withholding

To stop backup withholding, the payee will need to correct the reason they became subject to backup withholding.

This can include providing the correct TIN to the payer.


How to remit:

Visit Resident and Nonresident Withholding Guidelines (Pub 1017) for more information. Visit Form 592, Form 592-PTE and Form 592-F Instructions for further assistance.

How to avoid penalties

You must pay the withholding by due date to avoid penalties and interest.

  • If you do not withhold, you may have to pay the amount you’re required to withhold, including penalties and interest.

If you are assessed penalties and interest and disagree with the assessment, you may file a claim for refund. For more information visit Claim for refund.