What is a Withholding Agent? | IRS Definition of a Withholding Agent

A withholding agent is an individual or a business who is responsible for taxable income on for a foreign individual. A withholding agent has many rules and regulations they need to follow to live up to their responsibilities. An agent can be anyone who disburses income that is subject to withholding, and this is true even if there’s no requirement for those taxes to be actively withheld.

It isn’t always possible for a withholding agent to determine, at the time, the exact origin of the income or the amount to be withheld. In these scenarios, the withholding agent should withhold an amount that would be sufficient to cover at least 30%, but no more than 30% of the total amount to be paid. Because the responsibilities of a withholding agent may be complex, the agent should check with the NRA withholding regulations (non-resident alien regulations).


Written by Maurice Mallory