withholding tax

noun

: a deduction (as from wages, fees, or dividends) levied at a source of income as advance payment on income tax

Examples of withholding tax in a Sentence

Recent Examples on the Web

The legislation lifts the current $800 million limit on the total amount of capture income and withholding tax revenues to $1.6 billion. —Detroit Free Press, 18 July 2023

The release of $600,000 in withholding tax tied to unrepatriated earnings of its Russian subsidiary increased its tax rate, Kevin Daniels, the company’s chief accounting officer, said in a June 2 letter. —Mark Maurer, WSJ, 26 July 2022

Later in the day, the governor’s office announced a discrepancy in the budget numbers occurred because a state payroll withholding tax of nearly $2 million was tagged for fiscal year 2021 when it should have been tagged for fiscal year 2020, which caused an inflation in prospective money for 2020. —Tyler Arnold, Washington Examiner, 2 July 2020

When a studio pays an actor $1 million, it’s required to deduct a 25 percent withholding tax. —Mike Barnes, The Hollywood Reporter, 15 Aug. 2022

Regardless of which option the player takes, the IRS enforces a minimum 24% federal withholding tax on lottery winnings. —George Petras, USA TODAY, 10 Jan. 2023

In several states, including North Carolina, Ohio, and New York, public university systems refer patients to other state agencies for legal action or withholding tax refunds. —Noam N. Levey, Anchorage Daily News, 27 Dec. 2022

The changes raise the maximum level of future state income tax and state withholding tax that can be captured at the four development sites — then reimbursed to Bedrock — to 100% from 50%. —Jc Reindl, Detroit Free Press, 23 Aug. 2022

Without treaty protection, Russian investors in the United States would be subject to 30% of the U.S. withholding tax on U.S.-source dividends and related-party interest paid to residents of Russia. —Martin Sullivan, Forbes, 7 Mar. 2022

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Word History

First Known Use

1940, in the meaning defined above

Kids Definition

withholding tax

noun

: a deduction (as from one's wages) taken at a source of income (as one's employer) as an advance payment of income tax

Legal Definition

withholding tax

noun

with·​hold·​ing tax

: a deduction (as from wages, fees, or dividends) levied at a source of income as advance payment on income tax