Tax holds and backup withholding only apply to payments you receive for sales of goods and services on Venmo. This includes payments sent to your business profile or payments sent to your personal profile and tagged as a purchase by the sender.
If you haven’t received any payments for sales of goods and services, this won’t affect you. If you do receive these payments, we’ll let you know once you’re approaching the reporting threshold and whether any of your payments are on hold.
You can also watch the short video below for more details about this requirement and how to add your info.
Understanding tax holds and backup withholding
Why tax holds happen on Venmo
Tax holds happen when you exceed the federal reporting threshold for goods and services on Venmo and haven’t provided your tax ID (EIN, SSN, or ITIN). Venmo is required to collect your tax ID in order to comply with IRS reporting rules once your activity meets the reporting threshold. This requirement doesn’t apply to payments between friends and family, where the sender hasn’t tagged the payment as a purchase.
Reporting thresholds are set by federal and state law, and administered by the IRS and state revenue/tax agencies, not by Venmo.
For 2025, the federal threshold is $20,000 and 200 transactions. If your activity exceeds that threshold and you haven’t provided your TIN, Venmo may place your payments on hold or apply backup withholding (24%) until your tax information is verified. You’ll also receive a Form 1099-K for reportable Venmo activity that meets these thresholds.
You can provide your tax ID in the Venmo app to release tax holds and avoid backup withholding on your payments.
Backup withholding and when it happens
When backup withholding happens, Venmo sends 24% of your goods and services payments to the IRS to ensure any required taxes are paid. Venmo is required to apply backup withholding if your taxpayer information (EIN, SSN, or ITIN) is missing, incorrect, or unverified once your account activity reaches reporting thresholds for goods and services payments.
You’ll have a short window to provide your tax information after reaching the threshold. After that point, any held payments will be subject to 24% backup withholding each month until your information is verified.
You can provide your tax ID in the Venmo app to stop backup withholding and prevent it on future payments.
Why your payment is on tax hold
Venmo may place payments on hold if you receive money for goods and services and haven’t provided your taxpayer information (EIN, SSN, or ITIN). This gives you time to add your information and stay compliant with IRS rules before any backup withholding begins.
If your activity reaches the federal reporting threshold and your taxpayer information is still missing, Venmo will start applying 24% backup withholding to new goods and services payments you receive until your information is confirmed.
Because backup withholding is sent to the IRS monthly, you may see future payments on hold if you choose not to provide your tax ID by the next backup withholding date.
Is Venmo keeping my money?
No, Venmo is not keeping your money. Payments placed on tax hold are in your account, but they're unavailable to you until you provide your tax info or until the next backup withholding date. By providing your tax info, you and Venmo are acting in compliance with the new IRS requirements.
Did my buyer complete their payment?
Yes. Held payments have nothing to do with your buyer and you should feel confident about providing them with your goods and/or services. Their payment is waiting for you in your Venmo account. You just can’t access it until you provide your tax info.
How to resolve and prevent tax holds
How to provide your taxpayer information on Venmo
If Venmo needs your tax information, you’ll see a notification in the app. Venmo is required by the IRS to collect your tax ID when your account activity approaches federal reporting thresholds for goods and services payments.
There are a few different ways you can provide your tax ID in the Venmo app:
- Go to your Notifications page and follow the prompt
- Open Settings on the Me tab, then tap Identity Verification and fill in your info
- If you already have payments on hold, tap the Provide tax info button on your business profile homepage or payment details screen
Once your info is verified, future payments will process normally. If you had payments on tax hold, they should be released to your Venmo balance.
I already provided my taxpayer info. Why is my payment on hold?
If you’ve already provided your taxpayer information, you may still experience payment holds for a few different reasons. Read more about payment holds and what can cause them.
More about backup withholding
Venmo payments sent to IRS
If you see outgoing payments to the IRS from your Venmo account, those payments account for backup withholding due on the payments you received. You can tap on any of these outgoing payments to view additional details, including a link to the original payment you received.
If the full 24% of a payment is not available in your account at the time of a backup withholding date, we may need to collect backup withholding in multiple increments from your Venmo account.
We’ll only use funds in your Venmo balance (or held balance) to cover any amounts you owe for backup withholding.
Remember: You can provide your tax ID in the Venmo app to release tax holds and avoid backup withholding on your payments.
Can I get my backup withholding money back?
Funds sent to the IRS for backup withholding cannot be returned to you, but you can report the backup withholding on your tax return. For any questions about how this affects your taxes, please consult a licensed tax advisor.
Please note, if you’ve reached the backup withholding date for payments you received for goods and services without providing your tax ID, there isn’t a way to stop Venmo from collecting the 24% due to the IRS.
What is a backup withholding date?
Backup withholding is sent to the IRS once per month on a predetermined date. The date you see on Venmo is the date when your backup withholding funds will be sent to the IRS.