Is my business exempt from backup withholding?

In very rare circumstances, you may in fact be exempt from backup withholding. This applies to a very small subset of business and transaction types.

Exempt Business Types

• Government agencies
• Non-profit groups
• Banks and corporations

Exempt Transaction Types

• Unemployment compensation
• State or local income tax refunds
• Retirement account distributions
• Real estate sales
• Foreclosures
• Qualified tuition program earnings
• Cancelled debts
• Cash paid for fish (yes, really)
• Distributions from ESOPs (Employee Stock Ownership Plans)
• Long-term care benefits
• Distributions from MSAs (Archer Medical Savings Accounts)

If you fall into any one of these categories and have questions, please email [e-mail].