General Instructions For Certain Information Returns (Forms 1096, 1097, 1098, 1099, 3921, 3922, 5498, And W-2g)

W-9 and the separate Instructions for the Requester of

If you receive two incorrect TIN notices within 3 years for

Form W-9.

the same account, follow the procedures in Regulations

Examples of payments to which backup withholding

section 31.3406(d)-5(g) and Pub. 1281.

does not apply include but are not limited to the following.

3. Notice from the IRS that payee is subject to

Wages.

backup withholding due to notified payee

Distributions from a pension, annuity, profit-sharing or

underreporting. You may choose to withhold on any

stock bonus plan, any IRA, an owner-employee plan, or

reportable payment made to the account(s) subject to

other deferred compensation plan.

backup withholding after receipt of the notice, but you

Distributions from a medical or health savings account

must withhold on any reportable payment made to the

and long-term care benefits.

account more than 30 business days after you receive the

Certain surrenders of life insurance contracts.

notice. The IRS will notify you in writing when to stop

Distribution from qualified tuition programs or Coverdell

withholding, or the payee may furnish you a written

ESAs.

certification from the IRS stating when the withholding

Gambling winnings if regular gambling winnings

should stop. In most cases, the stop date will be January

withholding is required under section 3402(q). However, if

1 of the year following the year of the stop notice.

regular gambling winnings withholding is not required

You must notify the payee when withholding

under section 3402(q), backup withholding applies if the

under this procedure starts. For further

TIP

payee fails to furnish a TIN.

information, see Regulations section

Real estate transactions reportable under section

31.3406(c)-1(d).

6045(e).

Canceled debts reportable under section 6050P.

4. Payee failure to certify that he or she is not

Fish purchases for cash reportable under section

subject to backup withholding. Withhold on reportable

6050R.

interest and dividends until the certification has been

received.

When to apply backup withholding. Generally, the

For exceptions to these general timing rules, see

period for which the 28% should be withheld is as follows.

section 3406(e).

1. Failure to furnish TIN in the manner required.

Withhold on payments made until the TIN is furnished in

For special rules on backup withholding on

the manner required. Special backup withholding rules

gambling winnings, see the separate Instructions

TIP

may apply if the payee has applied for a TIN. The payee

for Forms W-2G and 5754.

may certify to this on Form W-9 by noting “Applied For” in

the TIN block and by signing the form. This form then

Reporting backup withholding. Report backup

becomes an “awaiting-TIN” certificate, and the payee has

withholding on Form 945, Annual Return of Withheld

60 days to obtain a TIN and furnish it to you. If you do not

Federal Income Tax. Also, report backup withholding and

receive a TIN from the payee within 60 days and you have

the amount of the payment on Forms W-2G, 1099-B, DIV,

not already begun backup withholding, begin backup

G, INT, K, MISC, OID, or PATR even if the amount of the

withholding and continue until the TIN is provided.

payment is less than the amount for which an information

return is normally required.

The 60-day exemption from backup withholding

Form 945. Report backup withholding, voluntary

applies only to interest and dividend payments

withholding on certain government payments, and

and certain payments made with respect to

CAUTION

withholding from gambling winnings, pensions, annuities,

readily tradable instruments. Therefore, any other

IRAs, military retirement, and Indian gaming profits on

payment, such as nonemployee compensation, is subject

Form 945. Generally, file Form 945 for 2017 by January

to backup withholding even if the payee has applied for

31, 2018. For more information, including the deposit

and is awaiting a TIN. For information about whether

requirements for Form 945, see the separate Instructions

backup withholding applies during the 60-day period, see

for Form 945, and Pub. 15 (Circular E), Employer's Tax

Regulations section 31.3406(g)-3.

Guide.

2. Notice from the IRS that payee's TIN is incorrect.

Do not report on Form 945 any income tax withholding

You may choose to withhold on any reportable payment

reported on the following forms.

made to the account(s) subject to backup withholding

Form W-2, including withholding on distributions to plan

after receipt of an incorrect TIN notice from the IRS, but

participants from nonqualified plans that must be reported

you must withhold on any reportable payment made to the

on Form 941, Employer's QUARTERLY Federal Tax

account more than 30 business days after you received

Return, and may be reported on Form 943, Employer's

the notice. Stop withholding within 30 days after you

Annual Tax Return for Agricultural Employees; Form 944,

receive a certified Form W-9 (or other form that requires

Employer's ANNUAL Federal Tax Return; or Schedule H

the payee to certify the payee’s TIN).

(Form 1040), Household Employment Taxes.

The IRS will furnish a notice to you, and you are

Form 1042-S must be reported on Form 1042, Annual

required to promptly furnish a “B” notice, or an

Withholding Tax Return for U.S. Source Income of

TIP

acceptable substitute, to the payee. For further

Foreign Persons.

information, see Regulations section 31.3406(d)-5 and

Pub. 1281, Backup Withholding for Missing and Incorrect

Name/TIN(s).

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Gen. Instr. for Certain Info. Returns (2017)

General Instructions For Certain Information Returns (Forms 1096, 1097, 1098, 1099, 3921, 3922, 5498, And W-2g) - 2017 Page 17

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