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Backup withholding on U.S. source payments to a foreign supplier
December 1, 2022
Q. When does federal tax withholding need to be done on U.S.-source payments (i.e., services performed in U.S.) made to foreign suppliers? Would this be considered backup withholding?
A.
(Answered by IOFM's third-party tax experts)
First: The term "backup withholding" ONLY applies in certain fact situations of payments to U.S. individuals and U.S. entities. Backup withholding (current rate 24%) would not be used for a foreign supplier, because backup withholding applies only in certain…
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