NRA/Backup (Income Tax) Withholding?

Hello, I received a new royalty check from my late father’s mineral interest in Garvin County, OK in 02/2024 that I inherited. On the production statement, the bottom line “Owner Check Amount” it shows a line called “NRA/Backup (Income Tax) Withholding” in the amount of $-583.47 (ouch!) which is 24% of the net amt. I’ve never seen this tax line on any of the other royalty payments and have searched this site using keywords with no results. Can anyone provide an explanation or where I can research what this tax is for? Thank you

Net Amt
Total Before Other Adjustments: 2,431.16
Interest Paid: 0.00
Miscellaneous: 0.00
State (Income Tax) Withholding: 0.00
NRA/Backup (Income Tax) Withholding: -583.47
Owner Check Amount: 1,8747.69

Most likely is that they are missing your W-9, so they are holding the federal taxes back and giving them to the feds. You can fix that by notifying them of your inheritance and returning the W-9 via certified mail return receipt. Keep a copy of all correspondence.

The heirs should send in their W-9s as your father no longer owns it. You may just have to account for the tax taken out already on your tax forms. Make sure that everyone who has inherited files their name and address and a description of the acreage in the county courthouse. The probate should also be filed in the Garvin county courthouse.

Thank you very much, there was mix up at the Garvin County courthouse in 2004 when my father passed when we inherited the minerals through probate. The check showed up in my father’s name last year, for a new horiz. well that had been drilled in Garvin County. We finally got the records updated and changed over to the heirs and I discovered this NRA/Backup Tax. Do I send a W-9

You need to send them a W-9 for YOU.

As Todd said, you are responsible for your W-9. The other heirs are responsible for theirs. If they ended up in a trust, then the trustee needs to send in the W-9 for the trust.

Yes, all heirs(4) were sent and returned a division order (verified acreage, and decimal interest) and attached Form W-9. The records at the Garvin County Courthouse have been updated. We received our first checks this month, and they said there is one check (currently) outstanding in my father’s name, once it is voided it will be disbursed to the heirs.

I also received a Form 1099-MISC 2023 (Box 2: Royalties $3,153, Box 4: Federal Withheld $187.33) in the name of my father using his TIN #, that I haven’t done any with, I assume this tax information will be carried over and transferred to the heirs for 2024?

I have visited this Forum for a long time and became a member in Mar 24 because of this question. I’m still no expert, but I am truly honored to have my #1 post answered by M_BARNES and TODD_M_BAKER, and within hours, a couple of true experts that provide a valuable service had my question answered. Mineral Rights/Ownership is a complicated business, but along with professionals like you and this Forum, it makes it a little more easy to understand or ask a question. Thank you, jpc

Ask the operator if they will split the tax up and give new 1099s to the heirs. They might or might not. You can check with your CPA on how to handle it if they don’t want to re-issue.

Welcome to the oil patch!

Most likely they won’t do anything with funds that were produced BEFORE your father’s estate was finalized. Until his estate was closed, all the accumulated revenue was owned by his estate and the heirs are responsible for the payment of those taxes due.

You should consult with the person/company that prepared your father’s final tax return and forward this 1099 to them to have things done properly.

You are on the right tract though.

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