This announcement is to advise payers about a reduction in the backup withholding rate authorized by section 3406(a)(1) of the Internal Revenue Code. Section 105(a) of the Jobs and Growth Tax Relief Reconciliation Act of 2003 (Public Law 108-27) reduced the rate for backup withholding on reportable payments.
For amounts paid after December 31, 2002, the backup withholding rate was reduced to 28%.
The backup withholding rate shown in the latest revision of the following products is incorrect for amounts paid after December 31, 2002
Instructions for the Requester of Form W-9
Instructions for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, and W-8IMY
The Instructions for the Requester of Form W-9 will be revised in December 2003, to reflect the new backup withholding rate for amounts paid after December 31, 2002.
The Instructions for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, and W-8IMY will be revised in August 2003 to reflect the new rates.
Publication 17, Your Federal Income Tax
Publication 225, Farmer’s Tax Guide
Publication 505, Tax Withholding and Estimated Tax
Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Corporations
Publication 525, Taxable and Nontaxable Income
Publication 542, Corporations
Publication 550, Investment Income and Expenses
Publication 583, Starting a Business and Keeping Records
Publication 1212, List of Original Issue Discount Instruments
The 2003 version of these publications will show the new backup withholding rate for amounts paid after December 31, 2002.
The backup withholding rate shown in the 2003 version of the following products is incorrect for amounts paid after December 31, 2002.
Form W-9, Request for Taxpayer Identification Number and Certification
Form W-2G, Certain Gambling Winnings
Form 1099-CAP, Changes in Corporate Control and Capital Structure
Form 1099-G, Certain Government Payments
Form 1099-INT, Interest Income
Form 1099-OID, Original Issue Discount
Form 1099-MISC, Miscellaneous Income
Form 1099-PATR, Taxable Distributions Received From Cooperatives
Instructions for Form 1042-S
The 2004 version of these forms and instructions will show the new backup withholding rate for amounts paid after December 31, 2002.
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