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Back  RFI # 1285: IRC3402 3% Withholding on 835

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Faith Mallett


IRC 3402 calls for a 3% withholding tax on behalf of government agencies on certain provider types and member types effective 1/1/12.

Where should this be reflected in the 835?

In the PLB using IR (IRS withholding)? If so, must a specific claim reference number be used? Or just a generic statement that will apply to the whole remit?

Or should the 3% be reflected in the CAS segment with Reason Code 105 (tax withholding)? Group code OA or CO?

Note that the 3% may not apply to ALL claims in a given remit/835.

thank you.

Submitter Assigned Keywords



Please note that RFIs should not be interpreted as legal guidance involving specific IRS rules. However, if a withholding is done at claim level, then CARC 105 should be utilized with group code CO in the CAS segment. If an amount withheld for federal taxes is calculated based on the total payment, and not as an adjustment to each claim, then a provider level adjustment (PLB segment) should be used with PLB03-1 code IR (IRS withhold).
Submission 3/29/2011
Status Date 6/1/2011
Status F - Final
Primary References
Document 005010x221
Set ID835