Navigate Up
Sign In
Last Updated: 4/7/2016

Backup Withholding

​When you pay someone to perform work for your business, that income is taxable and may be subject to backup withholding.

Minnesota follows the federal provision for backup withholding on payments for personal services.  Personal services include work performed for your business by a person who is not your employee.

If the person does not provide a Social Security or tax ID number, or if the number is incorrect, you must withhold tax equal to 9.85 percent of the payments. If you do not, you may be assessed the amount you should have withheld.  The assessment is subject to penalty and interest.

To help determine backup withholding, you can use our Minnesota Withholding Tax calculator.