Navigate Up
Sign In
Last Updated: 10/26/2017

Frequently Asked Questions

Contact Us

Withholding Tax

651-282-9999
800-657-3594
8:00 a.m.- 4:30 p.m. Mon.- Fri.

more

Related Information

Withholding Tax > Tax Information > Back up withholding

  • What is backup withholding?Back to top

    Backup withholding is withholding on payments made for personal services by an individual who does not provide a Social Security number, tax ID number, or an incorrect number. Personal services include work performed for your business by a person who is not your employee.

    The backup withholding rate is 9.85 percent (.0985) of the payment(s). If you do not withhold the backup withholding rate, you may be assessed the amount you should have withheld. The assessment is subject to penalty and interest.

  • When should I use backup withholding?Back to top

    You would use backup withholding when an individual who does not provide a Social Security number, tax ID number, or an incorrect number performs personal services for your business. ​

  • How do I file backup withholding?Back to top

    You file backup withholding the same way you file your payroll withholding tax.   ​

  • If the person does not report a Social Security number or tax ID, how do I issue a form to the individual reporting the information?Back to top

    You may fill out a Form 1099 to the individual and enter all 9’s when asked to enter the Social Security number. You may also leave that spot blank. It is the individual’s responsibility to provide you with an accurate Social Security number or Minnesota tax ID number.​

  • Do I need a Minnesota Withholding Tax ID number to withhold backup withholding?Back to top

    Yes, you will need a Minnesota Withholding Tax ID number to report backup withholding to the department. To apply for a Minnesota ID, see How do I get a Minnesota Tax ID Number. ​

  • If I have questions, who should I contact?Back to top

    You should contact a withholding tax customer service representative.​