Tax withholding on bank accounts

Learn what tax withholding is and what your options are.

Tax withholding on bank accounts

Learn what tax withholding is and what your options are.

What is backup tax withholding?

Backup tax withholding is an IRS required deduction from the income paid to your bank account(s). The most common type of income subject to backup withholding for a bank account would be interest and bonus payments. When backup withholding applies, 24% of the payment will be withheld and sent to the IRS. 

Why am I subject to backup tax withholding?

The most common causes for backup withholding are:

  • A Taxpayer Identification Number (TIN) was not provided on your account, or the name and TIN provided on your account do not match the Internal Revenue Service's (IRS) records.

  • The IRS has notified Capital One that we’re required to apply backup withholding due to your under reporting of income and dividends to the IRS.

  • You previously notified Capital One that you were subject to backup withholding.

How do I discontinue backup withholding?

We may be able to stop the backup withholding, depending on what caused it. Before backup withholding begins, Capital One sends a letter to the mailing address on your account to explain why the withholding was required.

  • If your account is subject to backup withholding because your name and TIN don’t match the IRS’s records:  Please follow the instructions provided in the backup withholding notice letter sent to you by Capital One. You may need to submit additional documentation based on IRS guidelines as explained in your letter.

  • If your account is subject to under-reporting backup withholding: If the IRS notifies us that you are no longer subject to withholding, we will stop the backup withholding within 30 days. Alternatively, if you have received a letter from the IRS stating that you are no longer subject to withholding, please provide it to us, so we can stop backup withholding.

There are a few ways to submit the documents necessary for removing backup withholding:

You can submit your request in person at a Capital One branch. Use our Branch Locator to find a branch near you.

You can fax the documents to us at 1-877-806-4430 ATTN: Capital One.

Or you can mail them to:

Capital One Bank
ATTN: Bank by Mail
PO BOX 85123
Richmond, VA 23285

Can backup withholding be refunded?

Capital One can’t refund backup withholding that occurred in previous tax years because we’ve already reported the withholding to the IRS. When federal income tax is withheld, it will be reported on a information return report (tax form), most commonly a 1099-INT. You may be able to reclaim your withheld funds from the IRS. Please contact your tax advisor for more information. 

Related Content

Checking & Savings

Tax forms from Capital One

Get familiar with the tax forms so you know what to expect.

Checking & Savings

Access my tax forms

You can find and print your tax forms online.