This study examined the income tax filing challenges experienced by Contract-of-Service (COS) personnel and assessed the effectiveness of withholding agencies in addressing these challenges. It focused on the variables of demographic profile, income tax filing challenges, and the effectiveness of withholding agencies. The study was conducted among Contract-of-Service (COS) in selected National Government Agencies in Los Baños, Laguna during the academic year 2025–2026, aiming to provide an input to a compliance framework that enhances tax compliance behavior. The study determined the respondents’ demographic profile, level of tax filing challenges, and perceived effectiveness of withholding agencies. It also examined the relationships among these variables and tested the hypothesis that no significant relationships exist between them. Statistical tools such as frequency, percentage, weighted mean, standard deviation, and Pearson’s correlation coefficient were used at a 0.05 level of significance. The study employed a descriptive-correlational research design. A total of 315 Contract-of-Service personnel were selected using stratified random sampling from various government agencies in Los Baños, Laguna. Data were collected through a researcher-made questionnaire consisting of three parts: demographic profile, tax filing challenges, and effectiveness of withholding agencies. The instrument was validated and administered printed forms and online platforms, ensuring confidentiality and voluntary participation. Findings revealed that Contract-of-Service personnel generally demonstrate adequate understanding of tax obligations but experience moderate challenges in technical aspects such as tax computation, penalties, and procedural processes. Awareness of filing deadlines was found to be moderate, particularly in identifying exact due dates and policy updates. Meanwhile, respondents showed relatively good familiarity with required tax forms, especially electronic filing systems. The study also found that withholding agencies are perceived as effective in providing guidance, issuing tax certificates, and communicating updates. Most importantly, a significant relationship exists between income tax filing challenges and the effectiveness of withholding agencies, indicating that stronger institutional support improves tax understanding and compliance. In conclusion, demographic factors have minimal influence on tax filing challenges, while the effectiveness of withholding agencies plays a crucial role in improving compliance. Strengthening institutional support is essential in reducing tax-related difficulties among Contract-of-Service personnel.