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question.jpgIn Federal Income Tax

What types of payment are subject to backup withholding?

While there are a variety of payments which backup withholding may apply to, generally, any payments which can be reported on an IRS Form 1099 can be subject to backup withholding. This includes interest payments, dividend payments, payments and profits from rent, money paid to an independent contractor (commissions, fees, etc.), broker payments, royalty payments and gambling winnings.