From Investopedia.com…..
A withholding tax is an amount that an employer withholds from employees’ wages and pays directly to the government. The amount withheld is a credit against the income taxes the employee must pay during the year. It also is a tax levied on income (interest and dividends) from securities owned by a nonresident alien, as well as other income paid to nonresidents of a country.1 Withholding tax is levied on the vast majority of people who earn income from a trade or business in the United States.2
