Contractor tax withholding off to a delayed start

Federal Drive

Contractor tax withholding off to a delayed start

The IRS issues rules to hold back part of contractor payments, then holds back the rule. We talk about the impact with Steve Charles with the immixGroup.

Federal News Network Staff

May 10, 2011 9:08 am

< a min read

wfedstaff | June 4, 2015 12:26 am

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Back in 2005, Congress passed a tax law that included a really tough provision. It requires agencies to withhold three percent of contractors’ payments against their future tax bills. The day of reckoning has come, and IRS issued a final rule yesterday. The good news is, agencies have a year to figure out how to deal with this controversial rule. The bad news is, the work starts now. Steve Charles, executive vice president of the immixGroup, a company that represents hundreds of contractors selling to the federal government, explains what’s ahead and what’s at stake.