An impact resistant tool or tool bit holder has an active end for driving a fastener and a shanking end for securing to a power tool. The active end includes a body with a bore to receive the shank and a pocket to receive a damping mechanism. The shank includes an end to engage the bore in the body, and a pocket to receive the damping mechanism. The shank is received in the bore in the body for limited rotation with respect to the body. A damping mechanism is positioned in the pockets to provide damping between the body and the shank during torque loading.