Withholding in a legal context means the action of deducting an amount or percentage established by the law from a person’s income, like from wages or dividends. Commonly, the withholding is made and subsequently paid to the government by the withholding party (e.g., the employer who withholds from the employee and pays it to the IRS).
See also: income tax; Internal Revenue Code
[Last updated in August of 2021 by the Wex Definitions Team]