Robinhood took 24% for IRS backup withholding - how to get my $2k back?

This is about Form W-9 certification. Brokers are required to withhold 24% for backup withholding when they don't have your certified Taxpayer Identification Number (usually your SSN). Robinhood is following IRS regulations here - this isn't new, but enforcement varies between brokers. You'll need to properly certify your TIN with Robinhood immediately to prevent further withholding. Go to their tax documents section and complete the W-9 certification. As for getting your money back, you'll claim the amount withheld as a credit on your tax return when you file. Look for "Federal income tax withheld" on the 1099 you'll receive from Robinhood. The amount withheld will be applied against any tax you owe, or added to your refund. You can't get it back immediately - you'll need to wait until you file your return.

After dealing with a similar situation through Robinhood (they withheld about $1700 from me), I found an amazingly helpful tool called taxr.ai (https://taxr.ai) that saved me so much headache. Their withholding analysis tool specifically helped me understand exactly how the backup withholding would impact my tax situation and showed me what forms I needed to file. The website actually analyzed my Robinhood statements and explained everything in simple terms - like why some brokers enforce this rule while others don't. It even showed me what my 1099-B would look like and exactly where on my tax return I'd need to claim the credit.

Just wanted to update - I tried taxr.ai after asking about it here and it was actually really helpful! It confirmed what everyone was saying about having to wait until tax time to get the money back, but it did something cool I wasn't expecting. It analyzed my trading pattern and showed that I might actually owe way less in taxes than what was withheld, so I'll likely get most of that withholding back. The document review feature helped me understand exactly what happened with the backup withholding and how to prevent it in the future. It also flagged some other potential tax issues with my trades I hadn't even considered. Definitely worth checking out if you're dealing with this backup withholding mess.

When I had a similar problem with the IRS holding my money, I couldn't get through to anyone on the phone for weeks. I finally used this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent who explained everything. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that the backup withholding is required by law when your TIN isn't certified, but they were able to access my account right there on the call and confirm they had received the withholding from Robinhood. They explained exactly which form to use when filing my taxes to get it back. Way better than waiting on hold for hours or getting disconnected repeatedly.

I take back what I said about Claimyr. I was super skeptical about the whole thing but decided to try it after waiting on hold with the IRS for 2+ hours and getting disconnected TWICE. It actually worked exactly as described - I got a call back when they reached an agent, and I was able to speak directly with someone from the IRS who confirmed my backup withholding situation. The agent explained that they could see the withholding in their system and walked me through exactly which line on my 1040 to claim it. Saved me so much time and frustration. Just knowing for sure that the IRS has record of my withholding gives me peace of mind that I'll actually get that money back when I file.

I used to work at a brokerage (not Robinhood). The W-9 certification is super important and often overlooked. Different brokers have different systems for verifying tax information. Fidelity might have already had your info verified through their systems, while Robinhood's verification process is separate. Also, there's been increased enforcement of backup withholding requirements in recent years. The 24% rate is specifically defined in the tax code for backup withholding situations. Be sure to check if they issued you a "B Notice" warning that this would happen - sometimes these notices get missed in email.

Has anyone here actually gotten their backup withholding back from the IRS? Like is it pretty straightforward when you file taxes or do they give you a hard time about it? I'm in the same boat with about $2,800 withheld.

I've been through this exact situation with backup withholding, and while it's frustrating to have your money tied up, the good news is that getting it back is actually pretty straightforward when you file your taxes. A few key points from my experience: 1. Make sure you get the corrected W-9 submitted to Robinhood ASAP to prevent this from happening on future trades. I had to call them twice to confirm it was processed properly. 2. When tax season comes, Robinhood will send you a 1099-B that shows both your proceeds AND the amount they withheld for backup withholding. This makes it easy for tax software to automatically calculate the credit you're owed. 3. The backup withholding gets treated just like regular tax withholding from a paycheck - it's applied against whatever you owe, and if it's more than your tax liability, you get the difference as a refund. 4. Keep all your documentation from Robinhood about the withholding. I also recommend taking screenshots of your account showing the withheld amounts, just in case there are any discrepancies on the 1099 forms. The waiting is the worst part, but at least you know the money isn't gone forever - it's just being held by the IRS until you can claim it back through your tax return.

This is a really frustrating situation, but you're definitely not alone in dealing with this backup withholding issue. I went through something similar with TD Ameritrade a couple years ago when they suddenly started enforcing the W-9 certification requirements more strictly. The key thing to understand is that this 24% backup withholding is essentially the IRS holding your money as collateral until you can prove you've properly reported your income. It's not a penalty - it's more like an overpayment that you'll get back when you file your taxes. Here's what I'd recommend based on my experience: 1. **Fix the W-9 immediately** - Log into your Robinhood account and complete the tax certification process. This won't get your current money back, but it will prevent future withholding. 2. **Keep detailed records** - Screenshot everything showing the withholding amounts, save all emails from Robinhood about this, and keep copies of your W-9 submission. 3. **Wait for your 1099-B** - Robinhood will send you a 1099-B form early next year that shows both your trading activity and the backup withholding amount. This is what you'll use to claim the credit on your tax return. 4. **File your taxes promptly** - The sooner you file, the sooner you can get your refund if you're owed one. The reason different brokers handle this differently is that they have varying levels of automation and verification systems. Some are more proactive about getting your tax info certified upfront, while others (like Robinhood apparently) are more reactive and impose withholding when issues arise. I know it's frustrating to have that money tied up, but at least it's earning you a guaranteed credit on your taxes rather than sitting in a low-interest account somewhere.

I went through this exact same situation with Robinhood last year and it's incredibly frustrating! The backup withholding caught me completely off guard too since I'd never had issues with other brokers. What helped me was understanding that this is actually a pretty common issue when transferring between brokers. Each brokerage has their own system for verifying tax information, and sometimes things don't transfer over properly even if you had everything set up correctly at your previous broker. A few things that might help: **Immediate steps**: Log into your Robinhood account right now and look for their tax documents section. You'll need to complete a new W-9 form with them. Don't assume they have your info just because Schwab did - treat it like a completely fresh setup. **Documentation**: Take screenshots of everything showing the backup withholding amounts and save all communications about this issue. You'll want this paper trail when tax season comes. **Timeline expectations**: Unfortunately, there's no way around waiting until you file your 2025 taxes to get that money back. The IRS has already received it from Robinhood, so it's essentially an advance payment on your taxes. **Silver lining**: If you don't end up owing much in taxes, you'll likely get most or all of that $2k back as a refund. The backup withholding often ends up being more than people actually owe. The good news is that once you get the W-9 properly submitted and verified, this shouldn't happen again on future trades. Just make sure to confirm with Robinhood that they've processed it before making any more significant transactions. Hang in there - I know it's frustrating to have that money tied up, but you will get it back!