My S-Corp Received a 1099-MISC and Federal Income Tax was Withheld (Box 4). How do I report this?

[DerekLLC]

I own a single-member LLC that has filed taxes as an S-Corp (1120S) for 10+ years.  In 2022, my S-Corp received a 1099-MISC from a client and the client had withheld 24% of the total payment for federal income tax purposes and sent those funds to the IRS. On my 1099-MISC, Box 2 (Royalties) has an amount and Box 4 (Federal income tax withheld) has an amount (24% of Box 2).

How do I receive credit for the funds that were paid to the IRS as reported in Box 4? I believe I am owed a refund of those funds based on my current tax situation, however, I cannot figure out how to register this withholding into TurboTax in order for TurboTax to calculate my overpayment.

I am using TurboTax Business 2022 for my S-Corp returns and TurboTax Home & Business 2022 for my personal tax returns. Any help on how best to proceed would be extremely appreciated.

Thank you!

[Mike9241 · Accepted solution]

that's backup withholding that you report on the k-1 box 13 code O. then you get credit for it when you file your 1040 line 25c

[DerekLLC]

You are truly a life saver! Thank you so much for your wisdom. I am very grateful!

[Mike9241]

I should have added something. Backup withholding (BUW) occurs when you don't furnish the proper EIN or SSN (in the case of individual) to the payer. They are supposed to request it on form w-9, and you are supposed to fill it out and send it back - use the EIN of the S-Corp if that's the proper recipient otherwise use your SSN for non-business items. 

BUW can also occur if you have properly filed your returns and paid the taxes due.