OA-105: Tax Withholding Amount

What Does OA-105 Mean?

OA-105 is the most common pairing for tax withholding adjustments. The OA group code signals that this is an administrative adjustment — not a contractual write-off or patient responsibility. The payer is required by IRS regulations to withhold taxes when TIN discrepancies exist. This is not a permanent reduction in your payment; the withheld funds go to the IRS and can be recovered through your tax return. However, the cash flow impact is immediate and persists until the TIN issue is corrected.

When CARC 105 appears on your remittance, the payer is deducting a portion of your payment for federal tax withholding. In most cases, this happens because the IRS has flagged your Tax Identification Number (TIN) as missing, incorrect, or mismatched, triggering mandatory backup withholding at the current IRS rate (typically 24%). The payer is legally obligated to withhold this amount and remit it to the IRS until the TIN discrepancy is resolved.

The most common scenario starts with an IRS B-notice. The IRS identifies a mismatch between the TIN the payer reported on 1099s and the IRS's records. The IRS then notifies the payer (via a B-1 or B-2 notice) to begin backup withholding on all future payments to that provider until a corrected W-9 is received and validated. This can also be triggered when a provider changes their legal entity structure, name, or TIN but fails to update the payer — creating a mismatch between the provider's current tax records and what the payer has on file.

CARC 105 has a compounding financial impact if not addressed quickly. Every payment processed while the TIN issue remains unresolved will have the backup withholding percentage deducted. The withheld amounts are recoverable through the provider's annual tax return as tax payments already made, but that creates a cash flow gap that can last months. The fastest resolution is to submit a corrected W-9 directly to the payer's provider enrollment department and confirm they update their records. Once the TIN is corrected, the payer should stop withholding on subsequent payments.

Common Causes

How to Resolve

Submit a corrected W-9 to the payer immediately, confirm the TIN update, and track previously withheld amounts for recovery through your tax return.

1. Identify the TIN discrepancy Contact the payer to determine the specific TIN issue — whether it is missing, incorrect, or flagged by an IRS B-notice.
2. Submit corrected tax documentation Provide a new W-9 with the correct TIN, legal name, and entity type. Include an IRS TIN validation letter if available.
3. Confirm withholding removal Follow up within 30 days to confirm the payer updated their records and removed the backup withholding from your account.
4. Track withheld amounts for tax filing Maintain a detailed log of all CARC 105 withholding amounts. Report these as tax payments already made when filing your annual tax return to recover the funds.

Common RARC Pairings

The RARC code tells you exactly what triggered the OA-105:

How to Prevent OA-105

• Maintain a current W-9 on file with every payer and update it immediately when your legal name, entity type, or TIN changes
• Verify that the TIN on your claims matches the TIN on file with the payer and the IRS
• Respond immediately to any IRS B-notices forwarded by payers regarding TIN mismatches
• Conduct an annual review of provider tax information on file with all payers
• Implement a credentialing update process that triggers when the provider's entity structure or TIN changes

General Prevention

• Maintain a current W-9 on file with every payer and update it immediately whenever the provider's legal name, entity type, or TIN changes
• Verify that the TIN on all claim submissions matches the TIN on file with the payer and the IRS exactly
• Respond promptly to any IRS B-notices (backup withholding notices) sent to the payer regarding TIN mismatches
• Conduct an annual review of provider tax information on file with all payers to ensure accuracy
• Implement a credentialing update process that triggers when the provider's entity structure, name, or TIN changes
• Track tax withholding adjustments on remittances and investigate immediately when CARC 105 appears unexpectedly

Also Filed As

The same CARC 105 may appear with different Group Codes:

Related Denial Codes