If a taxpayer earns wages as an employee, the employer should withhold income tax from the wages that are earned. withholding tax is also typically withheld from other payments such-as:

Securities

Explanation:

The amount that an employer withholds from an employees wage is called withholding tax. The employer pays this tax directly to the government on behalf of employee. The other form of this tax is levied on income sources of non residents of US e.g securities. Withholding taxes were first levied in 1862 during the presidency of Abraham Lincoln to finance the civil war. Income tax and tax withholding were abolished after 1872.

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