Businesses: Backup withholding is decreasing in 2018. Taxpayers are required to deduct backup withholding on certain non-wage payments made to those who filed information returns but they had missing or incorrect taxpayer identification numbers. The backup withholding rate is 28% through Dec. 31, 2017. But under the Tax Cuts and Jobs Act, it will be reduced to 24% on Jan. 1, 2018. Payments that may be subject to backup withholding include commissions, fees, other payments for work performed as an independent contractor, interest and dividends.