For the majority of taxpayers, backup withholding does not apply. But If a contractor or vendor has repeatedly provided false taxpayer identification numbers or underpaid taxes, then they are required to report on a W-9 form that backup withholding applies to them. If they fail to report to payers (people who pay them) then the payer may receive a CP2100 or CP2100A form from the IRS. These forms are notices that inform a payer that he or she may be responsible for backup withholding.
If you get this notice or are informed that you need to perform backup withholding for a payee it’s typically 28% of each payment to them that’s withheld and sent to the IRS.
$0.99 per payment