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Revise Tax Return

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Revise Tax Return

Revise tax return Publication 515 - Main Content Table of Contents Withholding of TaxWithholding Agent Withholding and Reporting Obligations Persons Subject to NRA WithholdingIdentifying the Payee Foreign Persons DocumentationBeneficial Owners Foreign Intermediaries and Foreign Flow-Through Entities Standards of Knowledge Presumption Rules Income Subject to NRA WithholdingSource of Income Fixed or Determinable Annual or Periodical Income (FDAP) Withholding on Specific IncomeEffectively Connected Income Income Not Effectively Connected Pay for Personal Services Performed Artists and Athletes (Income Codes 42 and 43) Other Income Foreign Governments and Certain Other Foreign Organizations U. Revise tax return S. Revise tax return Taxpayer Identification NumbersUnexpected payment. Revise tax return Depositing Withheld TaxesWhen Deposits Are Required Adjustment for Overwithholding Returns RequiredJoint owners. Revise tax return Electronic reporting. Revise tax return Partnership Withholding on Effectively Connected IncomeWho Must Withhold Foreign Partner Publicly Traded Partnerships U. Revise tax return S. Revise tax return Real Property InterestForeign corporations. Revise tax return Domestic corporations. Revise tax return U. Revise tax return S. Revise tax return real property holding corporations. Revise tax return Partnerships. Revise tax return Trusts and estates. Revise tax return Domestically controlled QIE. Revise tax return Late filing of certifications or notices. Revise tax return Certifications. Revise tax return Liability of agent or qualified substitute. Revise tax return Reporting and Paying the Tax Withholding Certificates Tax Treaty TablesTable 1 Table 2 Table 3 How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Revise tax return Withholding of Tax In most cases, a foreign person is subject to U. Revise tax return S. Revise tax return tax on its U. Revise tax return S. Revise tax return source income. Revise tax return Most types of U. Revise tax return S. Revise tax return source income received by a foreign person are subject to U. Revise tax return S. Revise tax return tax of 30%. Revise tax return A reduced rate, including exemption, may apply if there is a tax treaty between the foreign person's country of residence and the United States. Revise tax return The tax is generally withheld (NRA withholding) from the payment made to the foreign person. Revise tax return The term “NRA withholding” is used in this publication descriptively to refer to withholding required under sections 1441, 1442, and 1443 of the Internal Revenue Code. Revise tax return In most cases, NRA withholding describes the withholding regime that requires withholding on a payment of U. Revise tax return S. Revise tax return source income. Revise tax return Payments to foreign persons, including nonresident alien individuals, foreign entities, and governments, may be subject to NRA withholding. Revise tax return NRA withholding does not include withholding under section 1445 of the Code (see U. Revise tax return S. Revise tax return Real Property Interest, later) or under section 1446 of the Code (see Partnership Withholding on Effectively Connected Income , later). Revise tax return A withholding agent (defined next) is the person responsible for withholding on payments made to a foreign person. Revise tax return However, a withholding agent that can reliably associate the payment with documentation (discussed later) from a U. Revise tax return S. Revise tax return person is not required to withhold. Revise tax return In addition, a withholding agent may apply a reduced rate of withholding (including an exemption from withholding) if it can reliably associate the payment with documentation from a beneficial owner that is a foreign person entitled to a reduced rate of withholding. Revise tax return Withholding Agent You are a withholding agent if you are a U. Revise tax return S. Revise tax return or foreign person that has control, receipt, custody, disposal, or payment of any item of income of a foreign person that is subject to withholding. Revise tax return A withholding agent may be an individual, corporation, partnership, trust, association, nominee (under section 1446 of the Code), or any other entity, including any foreign intermediary, foreign partnership, or U. Revise tax return S. Revise tax return branch of certain foreign banks and insurance companies. Revise tax return You may be a withholding agent even if there is no requirement to withhold from a payment or even if another person has withheld the required amount from the payment. Revise tax return Although several persons may be withholding agents for a single payment, the full tax is required to be withheld only once. Revise tax return In most cases, the U. Revise tax return S. Revise tax return person who pays an amount subject to NRA withholding is the person responsible for withholding. Revise tax return However, other persons may be required to withhold. Revise tax return For example, a payment made by a flow-through entity or nonqualified intermediary that knows, or has reason to know, that the full amount of NRA withholding was not done by the person from which it receives a payment is required to do the appropriate withholding since it also falls within the definition of a withholding agent. Revise tax return In addition, withholding must be done by any qualified intermediary, withholding foreign partnership, or withholding foreign trust in accordance with the terms of its withholding agreement, discussed later. Revise tax return Liability for tax. Revise tax return   As a withholding agent, you are personally liable for any tax required to be withheld. Revise tax return This liability is independent of the tax liability of the foreign person to whom the payment is made. Revise tax return If you fail to withhold and the foreign payee fails to satisfy its U. Revise tax return S. Revise tax return tax liability, then both you and the foreign person are liable for tax, as well as interest and any applicable penalties. Revise tax return   The applicable tax will be collected only once. Revise tax return If the foreign person satisfies its U. Revise tax return S. Revise tax return tax liability, you are not liable for the tax but remain liable for any interest and penalties for failure to withhold. Revise tax return Determination of amount to withhold. Revise tax return   You must withhold on the gross amount subject to NRA withholding. Revise tax return You cannot reduce the gross amount by any deductions. Revise tax return However, see Scholarships and Fellowship Grants and Pay for Personal Services Performed , later, for when a deduction for a personal exemption may be allowed. Revise tax return   If the determination of the source of the income or the amount subject to tax depends on facts that are not known at the time of payment, you must withhold an amount sufficient to ensure that at least 30% of the amount subsequently determined to be subject to withholding is withheld. Revise tax return In no case, however, should you withhold more than 30% of the total amount paid. Revise tax return Or, you may make a reasonable estimate of the amount from U. Revise tax return S. Revise tax return sources and put a corresponding part of the amount due in escrow until the amount from U. Revise tax return S. Revise tax return sources can be determined, at which time withholding becomes due. Revise tax return When to withhold. Revise tax return   Withholding is required at the time you make a payment of an amount subject to withholding. Revise tax return A payment is made to a person if that person realizes income, whether or not there is an actual transfer of cash or other property. Revise tax return A payment is considered made to a person if it is paid for that person's benefit. Revise tax return For example, a payment made to a creditor of a person in satisfaction of that person's debt to the creditor is considered made to the person. Revise tax return A payment also is considered made to a person if it is made to that person's agent. Revise tax return   A U. Revise tax return S. Revise tax return partnership should withhold when any distributions that include amounts subject to withholding are made. Revise tax return However, if a foreign partner's distributive share of income subject to withholding is not actually distributed, the U. Revise tax return S. Revise tax return partnership must withhold on the foreign partner's distributive share of the income on the earlier of the date that a Schedule K-1 (Form 1065) is provided or mailed to the partner or the due date for furnishing that schedule. Revise tax return If the distributable amount consists of effectively connected income, see Partnership Withholding on Effectively Connected Income , later. Revise tax return A U. Revise tax return S. Revise tax return trust is required to withhold on the amount includible in the gross income of a foreign beneficiary to the extent the trust's distributable net income consists of an amount subject to withholding. Revise tax return To the extent a U. Revise tax return S. Revise tax return trust is required to distribute an amount subject to withholding but does not actually distribute the amount, it must withhold on the foreign beneficiary's allocable share at the time the income is required to be reported on Form 1042-S. Revise tax return Withholding and Reporting Obligations You are required to report payments subject to NRA withholding on Form 1042-S and to file a tax return on Form 1042. Revise tax return (See Returns Required , later. Revise tax return ) An exception from reporting may apply to individuals who are not required to withhold from a payment and who do not make the payment in the course of their trade or business. Revise tax return Form 1099 reporting and backup withholding. Revise tax return    You also may be responsible as a payer for reporting on Form 1099 payments made to a U. Revise tax return S. Revise tax return person. Revise tax return You must withhold 28% (backup withholding rate) from a reportable payment made to a U. Revise tax return S. Revise tax return person that is subject to Form 1099 reporting if any of the following apply. Revise tax return The U. Revise tax return S. Revise tax return person has not provided its taxpayer identification number (TIN) in the manner required. Revise tax return The IRS notifies you that the TIN furnished by the payee is incorrect. Revise tax return There has been a notified payee underreporting. Revise tax return There has been a payee certification failure. Revise tax return In most cases, a TIN must be provided by a U. Revise tax return S. Revise tax return non-exempt recipient on Form W-9, Request for Taxpayer Identification Number and Certification. Revise tax return A payer files a tax return on Form 945, Annual Return of Withheld Federal Income Tax, for backup withholding. Revise tax return You may be required to file Form 1099 and, if appropriate, backup withhold, even if you do not make the payments directly to that U. Revise tax return S. Revise tax return person. Revise tax return For example, you are required to report income paid to a foreign intermediary or flow-through entity that collects for a U. Revise tax return S. Revise tax return person subject to Form 1099 reporting. Revise tax return See Identifying the Payee , later, for more information. Revise tax return Also see Section S. Revise tax return Special Rules for Reporting Payments Made Through Foreign Intermediaries and Foreign Flow-Through Entities on Form 1099 in the General Instructions for Certain Information Returns. Revise tax return Foreign persons who provide Form W-8BEN, Form W-8ECI, or Form W-8EXP (or applicable documentary evidence) are exempt from backup withholding and Form 1099 reporting. Revise tax return Wages paid to employees. Revise tax return   If you are the employer of a nonresident alien, you generally must withhold taxes at graduated rates. Revise tax return See Pay for Personal Services Performed , later. Revise tax return Effectively connected income by partnerships. Revise tax return   A withholding agent that is a partnership (whether U. Revise tax return S. Revise tax return or foreign) is also responsible for withholding on its income effectively connected with a U. Revise tax return S. Revise tax return trade or business that is allocable to foreign partners. Revise tax return See Partnership Withholding on Effectively Connected Income , later, for more information. Revise tax return U. Revise tax return S. Revise tax return real property interest. Revise tax return   A withholding agent also may be responsible for withholding if a foreign person transfers a U. Revise tax return S. Revise tax return real property interest to the agent, or if it is a corporation, partnership, trust, or estate that distributes a U. Revise tax return S. Revise tax return real property interest to a shareholder, partner, or beneficiary that is a foreign person. Revise tax return See U. Revise tax return S. Revise tax return Real Property Interest , later. Revise tax return Persons Subject to NRA Withholding NRA withholding applies only to payments made to a payee that is a foreign person. Revise tax return It does not apply to payments made to U. Revise tax return S. Revise tax return persons. Revise tax return Usually, you determine the payee's status as a U. Revise tax return S. Revise tax return or foreign person based on the documentation that person provides. Revise tax return See Documentation , later. Revise tax return However, if you have received no documentation or you cannot reliably associate all or a part of a payment with documentation, then you must apply certain presumption rules, discussed later. Revise tax return Identifying the Payee In most cases, the payee is the person to whom you make the payment, regardless of whether that person is the beneficial owner of the income. Revise tax return However, there are situations in which the payee is a person other than the one to whom you actually make a payment. Revise tax return U. Revise tax return S. Revise tax return agent of foreign person. Revise tax return   If you make a payment to a U. Revise tax return S. Revise tax return person and you have actual knowledge that the U. Revise tax return S. Revise tax return person is receiving the payment as an agent of a foreign person, you must treat the payment as made to the foreign person. Revise tax return However, if the U. Revise tax return S. Revise tax return person is a financial institution, you may treat the institution as the payee provided you have no reason to believe that the institution will not comply with its own obligation to withhold. Revise tax return   If the payment is not subject to NRA withholding (for example, gross proceeds from the sales of securities), you must treat the payment as made to a U. Revise tax return S. Revise tax return person and not as a payment to a foreign person. Revise tax return You may be required to report the payment on Form 1099 and, if applicable, backup withhold. Revise tax return Disregarded entities. Revise tax return   A business entity that is not a corporation and that has a single owner may be disregarded as an entity separate from its owner (a disregarded entity) for federal tax purposes. Revise tax return The payee of a payment made to a disregarded entity is the owner of the entity. Revise tax return   If the owner of the entity is a foreign person, you must apply NRA withholding unless you can treat the foreign owner as a beneficial owner entitled to a reduced rate of withholding. Revise tax return   If the owner is a U. Revise tax return S. Revise tax return person, you do not apply NRA withholding. Revise tax return However, you may be required to report the payment on Form 1099 and, if applicable, backup withhold. Revise tax return You may assume that a foreign entity is not a disregarded entity unless you can reliably associate the payment with documentation provided by the owner or you have actual knowledge or reason to know that the foreign entity is a disregarded entity. Revise tax return Flow-Through Entities The payees of payments (other than income effectively connected with a U. Revise tax return S. Revise tax return trade or business) made to a foreign flow-through entity are the owners or beneficiaries of the flow-through entity. Revise tax return This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. Revise tax return Income that is, or is deemed to be, effectively connected with the conduct of a U. Revise tax return S. Revise tax return trade or business of a flow-through entity is treated as paid to the entity. Revise tax return All of the following are flow-through entities. Revise tax return A foreign partnership (other than a withholding foreign partnership). Revise tax return A foreign simple or foreign grantor trust (other than a withholding foreign trust). Revise tax return A fiscally transparent entity receiving income for which treaty benefits are claimed. Revise tax return See Fiscally transparent entity , later. Revise tax return In most cases, you treat a payee as a flow-through entity if it provides you with a Form W-8IMY (see Documentation , later) on which it claims such status. Revise tax return You also may be required to treat the entity as a flow-through entity under the presumption rules, discussed later. Revise tax return You must determine whether the owners or beneficiaries of a flow-through entity are U. Revise tax return S. Revise tax return or foreign persons, how much of the payment relates to each owner or beneficiary, and, if the owner or beneficiary is foreign, whether a reduced rate of NRA withholding applies. Revise tax return You make these determinations based on the documentation and other information (contained in a withholding statement) that is associated with the flow-through entity's Form W-8IMY. Revise tax return If you do not have all of the information that is required to reliably associate a payment with a specific payee, you must apply the presumption rules. Revise tax return See Documentation and Presumption Rules , later. Revise tax return Withholding foreign partnerships and withholding foreign trusts are not flow-through entities. Revise tax return Foreign partnerships. Revise tax return    A foreign partnership is any partnership that is not organized under the laws of any state of the United States or the District of Columbia or any partnership that is treated as foreign under the income tax regulations. Revise tax return If a foreign partnership is not a withholding foreign partnership, the payees of income are the partners of the partnership, provided the partners are not themselves a flow-through entity or a foreign intermediary. Revise tax return However, the payee is the partnership itself if the partnership is claiming treaty benefits on the basis that it is not fiscally transparent and that it meets all the other requirements for claiming treaty benefits. Revise tax return If a partner is a foreign flow-through entity or a foreign intermediary, you apply the payee determination rules to that partner to determine the payees. Revise tax return Example 1. Revise tax return A nonwithholding foreign partnership has three partners: a nonresident alien individual; a foreign corporation; and a U. Revise tax return S. Revise tax return citizen. Revise tax return You make a payment of U. Revise tax return S. Revise tax return source interest to the partnership. Revise tax return It gives you a Form W-8IMY with which it associates Form W-8BEN from the nonresident alien; Form W-8BEN from the foreign corporation; and Form W-9 from the U. Revise tax return S. Revise tax return citizen. Revise tax return The partnership also gives you a complete withholding statement that enables you to associate a part of the interest payment to each partner. Revise tax return You must treat all three partners as the payees of the interest payment as if the payment were made directly to them. Revise tax return Report the payment to the nonresident alien and the foreign corporation on Forms 1042-S. Revise tax return Report the payment to the U. Revise tax return S. Revise tax return citizen on Form 1099-INT. Revise tax return Example 2. Revise tax return A nonwithholding foreign partnership has two partners: a foreign corporation and a nonwithholding foreign partnership. Revise tax return The second partnership has two partners, both nonresident alien individuals. Revise tax return You make a payment of U. Revise tax return S. Revise tax return source interest to the first partnership. Revise tax return It gives you a valid Form W-8IMY with which it associates a Form W-8BEN from the foreign corporation and a Form W-8IMY from the second partnership. Revise tax return In addition, Forms W-8BEN from the partners are associated with the Form W-8IMY from the second partnership. Revise tax return The Forms W-8IMY from the partnerships have complete withholding statements associated with them. Revise tax return Because you can reliably associate a part of the interest payment with the Form W-8BEN provided by the foreign corporation and the Forms W-8BEN provided by the nonresident alien individual partners as a result of the withholding statements, you must treat them as the payees of the interest. Revise tax return Example 3. Revise tax return You make a payment of U. Revise tax return S. Revise tax return source dividends to a withholding foreign partnership. Revise tax return The partnership has two partners, both foreign corporations. Revise tax return You can reliably associate the payment with a valid Form W-8IMY from the partnership on which it represents that it is a withholding foreign partnership. Revise tax return You must treat the partnership as the payee of the dividends. Revise tax return Foreign simple and grantor trust. Revise tax return   A trust is foreign unless it meets both of the following tests. Revise tax return A court within the United States is able to exercise primary supervision over the administration of the trust. Revise tax return One or more U. Revise tax return S. Revise tax return persons have the authority to control all substantial decisions of the trust. Revise tax return   In most cases, a foreign simple trust is a foreign trust that is required to distribute all of its income annually. Revise tax return A foreign grantor trust is a foreign trust that is treated as a grantor trust under sections 671 through 679 of the Code. Revise tax return   The payees of a payment made to a foreign simple trust are the beneficiaries of the trust. Revise tax return The payees of a payment made to a foreign grantor trust are the owners of the trust. Revise tax return However, the payee is the foreign simple or grantor trust itself if the trust is claiming treaty benefits on the basis that it is not fiscally transparent and that it meets all the other requirements for claiming treaty benefits. Revise tax return If the beneficiaries or owners are themselves flow-through entities or foreign intermediaries, you apply the payee determination rules to that beneficiary or owner to determine the payees. Revise tax return Example. Revise tax return A foreign simple trust has three beneficiaries: two nonresident alien individuals and a U. Revise tax return S. Revise tax return citizen. Revise tax return You make a payment of interest to the foreign trust. Revise tax return It gives you a Form W-8IMY with which it associates Forms W-8BEN from the nonresident aliens and a Form W-9 from the U. Revise tax return S. Revise tax return citizen. Revise tax return The trust also gives you a complete withholding statement that enables you to associate a part of the interest payment with the forms provided by each beneficiary. Revise tax return You must treat all three beneficiaries as the payees of the interest payment as if the payment were made directly to them. Revise tax return Report the payment to the nonresident aliens on Forms 1042-S. Revise tax return Report the payment to the U. Revise tax return S. Revise tax return citizen on Form 1099-INT. Revise tax return Fiscally transparent entity. Revise tax return   If a reduced rate of withholding under an income tax treaty is claimed, a flow-through entity includes any entity in which the interest holder must treat the entity as fiscally transparent. Revise tax return The determination of whether an entity is fiscally transparent is made on an item of income basis (that is, the determination is made separately for interest, dividends, royalties, etc. Revise tax return ). Revise tax return The interest holder in an entity makes the determination by applying the laws of the jurisdiction where the interest holder is organized, incorporated, or otherwise considered a resident. Revise tax return An entity is considered to be fiscally transparent for the income to the extent the laws of that jurisdiction require the interest holder to separately take into account on a current basis the interest holder's share of the income, whether or not distributed to the interest holder, and the character and source of the income to the interest holder are determined as if the income was realized directly from the source that paid it to the entity. Revise tax return Subject to the standards of knowledge rules discussed later, you generally make the determination that an entity is fiscally transparent based on a Form W-8IMY provided by the entity. Revise tax return   The payees of a payment made to a fiscally transparent entity are the interest holders of the entity. Revise tax return Example. Revise tax return Entity A is a business organization organized under the laws of country X that has an income tax treaty in force with the United States. Revise tax return A has two interest holders, B and C. Revise tax return B is a corporation organized under the laws of country Y. Revise tax return C is a corporation organized under the laws of country Z. Revise tax return Both countries Y and Z have an income tax treaty in force with the United States. Revise tax return A receives royalty income from U. Revise tax return S. Revise tax return sources that is not effectively connected with the conduct of a trade or business in the United States. Revise tax return For U. Revise tax return S. Revise tax return income tax purposes, A is treated as a partnership. Revise tax return Country X treats A as a partnership and requires the interest holders in A to separately take into account on a current basis their respective shares of the income paid to A even if the income is not distributed. Revise tax return The laws of country X provide that the character and source of the income to A's interest holders are determined as if the income was realized directly from the source that paid it to A. Revise tax return Accordingly, A is fiscally transparent in its jurisdiction, country X. Revise tax return B and C are not fiscally transparent under the laws of their respective countries of incorporation. Revise tax return Country Y requires B to separately take into account on a current basis B's share of the income paid to A, and the character and source of the income to B is determined as if the income was realized directly from the source that paid it to A. Revise tax return Accordingly, A is fiscally transparent for that income under the laws of country Y, and B is treated as deriving its share of the U. Revise tax return S. Revise tax return source royalty income for purposes of the U. Revise tax return S. Revise tax return -Y income tax treaty. Revise tax return Country Z, on the other hand, treats A as a corporation and does not require C to take into account its share of A's income on a current basis whether or not distributed. Revise tax return Therefore, A is not treated as fiscally transparent under the laws of country Z. Revise tax return Accordingly, C is not treated as deriving its share of the U. Revise tax return S. Revise tax return source royalty income for purposes of the U. Revise tax return S. Revise tax return -Z income tax treaty. Revise tax return Foreign Intermediaries In most cases, if you make payments to a foreign intermediary, the payees are the persons for whom the foreign intermediary collects the payment, such as account holders or customers, not the intermediary itself. Revise tax return This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. Revise tax return You may, however, treat a qualified intermediary that has assumed primary withholding responsibility for a payment as the payee, and you are not required to withhold. Revise tax return An intermediary is a custodian, broker, nominee, or any other person that acts as an agent for another person. Revise tax return A foreign intermediary is either a qualified intermediary or a nonqualified intermediary. Revise tax return In most cases, you determine whether an entity is a qualified intermediary or a nonqualified intermediary based on the representations the intermediary makes on Form W-8IMY. Revise tax return You must determine whether the customers or account holders of a foreign intermediary are U. Revise tax return S. Revise tax return or foreign persons and, if the account holder or customer is foreign, whether a reduced rate of NRA withholding applies. Revise tax return You make these determinations based on the foreign intermediary's Form W-8IMY and associated information and documentation. Revise tax return If you do not have all of the information or documentation that is required to reliably associate a payment with a payee, you must apply the presumption rules. Revise tax return See Documentation and Presumption Rules , later. Revise tax return Nonqualified intermediary. Revise tax return   A nonqualified intermediary (NQI) is any intermediary that is a foreign person and that is not a qualified intermediary. Revise tax return The payees of a payment made to an NQI are the customers or account holders on whose behalf the NQI is acting. Revise tax return Example. Revise tax return You make a payment of interest to a foreign bank that is a nonqualified intermediary. Revise tax return The bank gives you a Form W-8IMY and the Forms W-8BEN of two foreign persons, and a Form W-9 from a U. Revise tax return S. Revise tax return person for whom the bank is collecting the payments. Revise tax return The bank also associates with its Form W-8IMY a withholding statement on which it allocates the interest payment to each account holder and provides all other information required to be on the withholding statement. Revise tax return The account holders are the payees of the interest payment. Revise tax return You should report the part of the interest paid to the two foreign persons on Forms 1042-S and the part paid to the U. Revise tax return S. Revise tax return person on Form 1099-INT. Revise tax return Qualified intermediary. Revise tax return   A qualified intermediary (QI) is any foreign intermediary (or foreign branch of a U. Revise tax return S. Revise tax return intermediary) that has entered into a qualified intermediary withholding agreement (discussed later) with the IRS. Revise tax return You may treat a QI as a payee to the extent the QI assumes primary withholding responsibility or primary Form 1099 reporting and backup withholding responsibility for a payment. Revise tax return In this situation, the QI is required to withhold the tax. Revise tax return You can determine whether a QI has assumed responsibility from the Form W-8IMY provided by the QI. Revise tax return   A payment to a QI to the extent it does not assume primary NRA withholding responsibility is considered made to the person on whose behalf the QI acts. Revise tax return If a QI does not assume Form 1099 reporting and backup withholding responsibility, you must report on Form 1099 and, if applicable, backup withhold as if you were making the payment directly to the U. Revise tax return S. Revise tax return person. Revise tax return Branches of financial institutions. Revise tax return   Branches of financial institutions are not permitted to operate as QIs if they are located outside of countries having approved “know-your-customer” (KYC) rules. Revise tax return The countries with approved KYC rules are listed on IRS. Revise tax return gov. Revise tax return QI withholding agreement. Revise tax return   Foreign financial institutions and foreign branches of U. Revise tax return S. Revise tax return financial institutions can enter into an agreement with the IRS to be a qualified intermediary. Revise tax return   A QI is entitled to certain simplified withholding and reporting rules. Revise tax return In general, there are three major areas whereby intermediaries with QI status are afforded such simplified treatment. Revise tax return   To apply for QI status, complete Form 14345, Qualified Intermediary Application, and Form SS-4, Application for Employer Identification Number. Revise tax return These forms, and the procedures required to obtain a QI withholding agreement are available at www. Revise tax return irs. Revise tax return gov/Businesses/Corporations/Qualified-Intermediaries-(QI). Revise tax return Documentation. Revise tax return   A QI is not required to forward documentation obtained from foreign account holders to the U. Revise tax return S. Revise tax return withholding agent from whom the QI receives a payment of U. Revise tax return S. Revise tax return source income. Revise tax return The QI maintains such documentation at its location and provides the U. Revise tax return S. Revise tax return withholding agent with withholding rate pools. Revise tax return A withholding rate pool is a payment of a single type of income that is subject to a single rate of withholding. Revise tax return   A QI is required to provide the U. Revise tax return S. Revise tax return withholding agent with information regarding U. Revise tax return S. Revise tax return persons subject to Form 1099 information reporting unless the QI assumes the primary obligation to do Form 1099 reporting and backup withholding. Revise tax return   If a QI obtains documentary evidence under the “know-your-customer” rules that apply to the QI under local law, and the documentary evidence is of a type specified in an attachment to the QI agreement, the documentary evidence remains valid until there is a change in circumstances or the QI knows the information is incorrect. Revise tax return This indefinite validity period rule does not apply to Forms W-8 or to documentary evidence that is not of the type specified in the attachment to the agreement. Revise tax return Form 1042-S reporting. Revise tax return   A QI is permitted to report payments made to its direct foreign account holders on a pooled basis rather than reporting payments to each direct account holder specifically. Revise tax return Pooled basis reporting is not available for payments to certain account holders, such as a nonqualified intermediary or a flow-through entity (discussed earlier). Revise tax return Collective refund procedures. Revise tax return   A QI may seek a refund on behalf of its direct account holders. Revise tax return The direct account holders, therefore, are not required to file returns with the IRS to obtain refunds, but rather may obtain them from the QI. Revise tax return U. Revise tax return S. Revise tax return branches of foreign banks and foreign insurance companies. Revise tax return   Special rules apply to a U. Revise tax return S. Revise tax return branch of a foreign bank subject to Federal Reserve Board supervision or a foreign insurance company subject to state regulatory supervision. Revise tax return If you agree to treat the branch as a U. Revise tax return S. Revise tax return person, you may treat the branch as a U. Revise tax return S. Revise tax return payee for a payment subject to NRA withholding provided you receive a Form W-8IMY from the U. Revise tax return S. Revise tax return branch on which the agreement is evidenced. Revise tax return If you treat the branch as a U. Revise tax return S. Revise tax return payee, you are not required to withhold. Revise tax return Even though you agree to treat the branch as a U. Revise tax return S. Revise tax return person, you must report the payment on Form 1042-S. Revise tax return   A financial institution organized in a U. Revise tax return S. Revise tax return possession is treated as a U. Revise tax return S. Revise tax return branch. Revise tax return The special rules discussed in this section apply to a possessions financial institution. Revise tax return   If you are paying a U. Revise tax return S. Revise tax return branch an amount that is not subject to NRA withholding, treat the payment as made to a foreign person, irrespective of any agreement to treat the branch as a U. Revise tax return S. Revise tax return person for amounts subject to NRA withholding. Revise tax return Consequently, amounts not subject to NRA withholding that are paid to a U. Revise tax return S. Revise tax return branch are not subject to Form 1099 reporting or backup withholding. Revise tax return   Alternatively, a U. Revise tax return S. Revise tax return branch may provide you with a Form W-8IMY with which it associates the documentation of the persons on whose behalf it acts. Revise tax return In this situation, the payees are the persons on whose behalf the branch acts provided you can reliably associate the payment with valid documentation from those persons. Revise tax return See Nonqualified Intermediaries under  Documentation, later. Revise tax return   If the U. Revise tax return S. Revise tax return branch does not provide you with a Form W-8IMY, then you should treat a payment subject to NRA withholding as made to the foreign person of which the branch is a part and the income as effectively connected with the conduct of a trade or business in the United States. Revise tax return Withholding foreign partnership and foreign trust. Revise tax return   A withholding foreign partnership (WP) is any foreign partnership that has entered into a WP withholding agreement with the IRS and is acting in that capacity. Revise tax return A withholding foreign trust (WT) is a foreign simple or grantor trust that has entered into a WT withholding agreement with the IRS and is acting in that capacity. Revise tax return   A WP or WT may act in that capacity only for payments of amounts subject to NRA withholding that are distributed to, or included in the distributive share of, its direct partners, beneficiaries, or owners. Revise tax return A WP or WT acting in that capacity must assume NRA withholding responsibility for these amounts. Revise tax return You may treat a WP or WT as a payee if it has provided you with documentation (discussed later) that represents that it is acting as a WP or WT for such amounts. Revise tax return WP and WT withholding agreements. Revise tax return   The WP and WT withholding agreements and the application procedures for the agreements are in Revenue Procedure 2003-64. Revise tax return Also see the following items. Revise tax return Revenue Procedure 2004-21. Revise tax return Revenue Procedure 2005-77. Revise tax return Employer identification number (EIN). Revise tax return   A completed Form SS-4 must be submitted with the application for being a WP or WT. Revise tax return The WP or WT will be assigned a WP-EIN or WT-EIN to be used only when acting in that capacity. Revise tax return Documentation. Revise tax return   A WP or WT must provide you with a Form W-8IMY that certifies that the WP or WT is acting in that capacity and a written statement identifying the amounts for which it is so acting. Revise tax return The statement is not required to contain withholding rate pool information or any information relating to the identity of a direct partner, beneficiary, or owner. Revise tax return The Form W-8IMY must contain the WP-EIN or WT-EIN. Revise tax return Foreign Persons A payee is subject to NRA withholding only if it is a foreign person. Revise tax return A foreign person includes a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, foreign estate, and any other person that is not a U. Revise tax return S. Revise tax return person. Revise tax return It also includes a foreign branch of a U. Revise tax return S. Revise tax return financial institution if the foreign branch is a qualified intermediary. Revise tax return In most cases, the U. Revise tax return S. Revise tax return branch of a foreign corporation or partnership is treated as a foreign person. Revise tax return Nonresident alien. Revise tax return   A nonresident alien is an individual who is not a U. Revise tax return S. Revise tax return citizen or a resident alien. Revise tax return A resident of a foreign country under the residence article of an income tax treaty is a nonresident alien individual for purposes of withholding. Revise tax return Married to U. Revise tax return S. Revise tax return citizen or resident alien. Revise tax return   Nonresident alien individuals married to U. Revise tax return S. Revise tax return citizens or resident aliens may choose to be treated as resident aliens for certain income tax purposes. Revise tax return However, these individuals are still subject to the NRA withholding rules that apply to nonresident aliens for all income except wages. Revise tax return Wages paid to these individuals are subject to graduated withholding. Revise tax return See Wages Paid to Employees—Graduated Withholding . Revise tax return Resident alien. Revise tax return   A resident alien is an individual who is not a citizen or national of the United States and who meets either the green card test or the substantial presence test for the calendar year. Revise tax return Green card test. Revise tax return An alien is a resident alien if the individual was a lawful permanent resident of the United States at any time during the calendar year. Revise tax return This is known as the green card test because these aliens hold immigrant visas (also known as green cards). Revise tax return Substantial presence test. Revise tax return An alien is considered a resident alien if the individual meets the substantial presence test for the calendar year. Revise tax return Under this test, the individual must be physically present in the United States on at least: 31 days during the current calendar year, and 183 days during the current year and the 2 preceding years, counting all the days of physical presence in the current year, but only 1/3 the number of days of presence in the first preceding year, and only 1/6 the number of days in the second preceding year. Revise tax return   In most cases, the days the alien is in the United States as a teacher, student, or trainee on an “F,” “J,” “M,” or “Q” visa are not counted. Revise tax return This exception is for a limited period of time. Revise tax return   For more information on resident and nonresident status, the tests for residence, and the exceptions to them, see Publication 519. Revise tax return Note. Revise tax return   If your employee is late in notifying you that his or her status changed from nonresident alien to resident alien, you may have to make an adjustment to Form 941 if that employee was exempt from withholding of social security and Medicare taxes as a nonresident alien. Revise tax return For more information on making adjustments, see chapter 13 of Publication 15 (Circular E). Revise tax return Resident of a U. Revise tax return S. Revise tax return possession. Revise tax return   A bona fide resident of Puerto Rico, the U. Revise tax return S. Revise tax return Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands (CNMI), or American Samoa who is not a U. Revise tax return S. Revise tax return citizen or a U. Revise tax return S. Revise tax return national is treated as a nonresident alien for the withholding rules explained here. Revise tax return A bona fide resident of a possession is someone who: Meets the presence test, Does not have a tax home outside the possession, and Does not have a closer connection to the United States or to a foreign country than to the possession. Revise tax return   For more information, see Publication 570, Tax Guide for Individuals With Income From U. Revise tax return S. Revise tax return Possessions. Revise tax return Foreign corporations. Revise tax return   A foreign corporation is one that does not fit the definition of a domestic corporation. Revise tax return A domestic corporation is one that was created or organized in the United States or under the laws of the United States, any of its states, or the District of Columbia. Revise tax return Guam or Northern Mariana Islands corporations. Revise tax return   A corporation created or organized in, or under the laws of, Guam or the CNMI is not considered a foreign corporation for the purpose of withholding tax for the tax year if: At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons; and At least 20% of the corporation's gross income is derived from sources within Guam or the CNMI for the 3-year period ending with the close of the preceding tax year of the corporation (or the period the corporation has been in existence, if less). Revise tax return Note. Revise tax return   The provisions discussed below under U. Revise tax return S. Revise tax return Virgin Islands and American Samoa corporations will apply to Guam or CNMI corporations when an implementing agreement is in effect between the United States and that possession. Revise tax return U. Revise tax return S. Revise tax return Virgin Islands and American Samoa corporations. Revise tax return   A corporation created or organized in, or under the laws of, the U. Revise tax return S. Revise tax return Virgin Islands or American Samoa is not considered a foreign corporation for the purposes of withholding tax for the tax year if: At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons, At least 65% of the corporation's gross income is effectively connected with the conduct of a trade or business in the U. Revise tax return S. Revise tax return Virgin Islands, American Samoa, Guam, the CNMI, or the United States for the 3-year period ending with the close of the tax year of the corporation (or the period the corporation or any predecessor has been in existence, if less), and No substantial part of the income of the corporation is used, directly or indirectly, to satisfy obligations to a person who is not a bona fide resident of the U. Revise tax return S. Revise tax return Virgin Islands, American Samoa, Guam, the CNMI, or the United States. Revise tax return Foreign private foundations. Revise tax return   A private foundation that was created or organized under the laws of a foreign country is a foreign private foundation. Revise tax return Gross investment income from sources within the United States paid to a qualified foreign private foundation is subject to NRA withholding at a 4% rate (unless exempted by a treaty) rather than the ordinary statutory 30% rate. Revise tax return Other foreign organizations, associations, and charitable institutions. Revise tax return   An organization may be exempt from income tax under section 501(a) of the Internal Revenue Code even if it was formed under foreign law. Revise tax return In most cases, you do not have to withhold tax on payments of income to these foreign tax-exempt organizations unless the IRS has determined that they are foreign private foundations. Revise tax return   Payments to these organizations, however, must be reported on Form 1042-S, even though no tax is withheld. Revise tax return   You must withhold tax on the unrelated business income (as described in Publication 598, Tax on Unrelated Business Income of Exempt Organizations) of foreign tax-exempt organizations in the same way that you would withhold tax on similar income of nonexempt organizations. Revise tax return U. Revise tax return S. Revise tax return branches of foreign persons. Revise tax return   In most cases, a payment to a U. Revise tax return S. Revise tax return branch of a foreign person is a payment made to the foreign person. Revise tax return However, you may treat payments to U. Revise tax return S. Revise tax return branches of foreign banks and foreign insurance companies (discussed earlier) that are subject to U. Revise tax return S. Revise tax return regulatory supervision as payments made to a U. Revise tax return S. Revise tax return person, if you and the U. Revise tax return S. Revise tax return branch have agreed to do so, and if their agreement is evidenced by a withholding certificate, Form W-8IMY. Revise tax return For this purpose, a financial institution organized under the laws of a U. Revise tax return S. Revise tax return possession is treated as a U. Revise tax return S. Revise tax return branch. Revise tax return Documentation In most cases, you must withhold 30% from the gross amount paid to a foreign payee unless you can reliably associate the payment with valid documentation that establishes either of the following. Revise tax return The payee is a U. Revise tax return S. Revise tax return person. Revise tax return The payee is a foreign person that is the beneficial owner of the income and is entitled to a reduced rate of withholding. Revise tax return In most cases, you must get the documentation before you make the payment. Revise tax return The documentation is not valid if you know, or have reason to know, that it is unreliable or incorrect. Revise tax return See Standards of Knowledge , later. Revise tax return If you cannot reliably associate a payment with valid documentation, you must use the presumption rules discussed later. Revise tax return For example, if you do not have documentation or you cannot determine the part of a payment that is allocable to specific documentation, you must use the presumption rules. Revise tax return The specific types of documentation are discussed in this section. Revise tax return However, see Withholding on Specific Income , later, as well as the instructions to the particular forms. Revise tax return As the withholding agent, you also may want to see the Instructions for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, and W-8IMY. Revise tax return Section 1446 withholding. Revise tax return   Under section 1446 of the Code, a partnership must withhold tax on its effectively connected income allocable to a foreign partner. Revise tax return In most cases, a partnership determines if a partner is a foreign partner and the partner's tax classification based on the withholding certificate provided by the partner. Revise tax return This is the same documentation that is filed for NRA withholding, but may require additional information as discussed under each of the forms in this section. Revise tax return Joint owners. Revise tax return    If you make a payment to joint owners, you need to get documentation from each owner. Revise tax return Form W-9. Revise tax return   In most cases, you can treat the payee as a U. Revise tax return S. Revise tax return person if the payee gives you a Form W-9. Revise tax return The Form W-9 can be used only by a U. Revise tax return S. Revise tax return person and must contain the payee's taxpayer identification number (TIN). Revise tax return If there is more than one owner, you may treat the total amount as paid to a U. Revise tax return S. Revise tax return person if any one of the owners gives you a Form W-9. Revise tax return See U. Revise tax return S. Revise tax return Taxpayer Identification Numbers , later. Revise tax return U. Revise tax return S. Revise tax return persons are not subject to NRA withholding, but may be subject to Form 1099 reporting and backup withholding. Revise tax return Form W-8. Revise tax return   In most cases, a foreign payee of the income should give you a form in the Form W-8 series. Revise tax return Until further notice, you can rely upon Forms W-8 that contain a P. Revise tax return O. Revise tax return box as a permanent residence address provided you do not know, or have reason to know, that the person providing the form is a U. Revise tax return S. Revise tax return person and that a street address is available. Revise tax return You may rely on Forms W-8 for which there is a U. Revise tax return S. Revise tax return mailing address provided you received the form prior to December 31, 2001. Revise tax return   If certain requirements are met, the foreign person can give you documentary evidence, rather than a Form W-8. Revise tax return You can rely on documentary evidence in lieu of a Form W-8 for a payment made in a U. Revise tax return S. Revise tax return possession. Revise tax return Other documentation. Revise tax return   Other documentation may be required to claim an exemption from, or a reduced rate of, withholding on pay for personal services. Revise tax return The nonresident alien individual may have to give you a Form W-4 or a Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual. Revise tax return These forms are discussed in Pay for Personal Services Performed under Withholding on Specific Income. Revise tax return Beneficial Owners If all the appropriate requirements have been established on a Form W-8BEN, W-8ECI, W-8EXP or, if applicable, on documentary evidence, you may treat the payee as a foreign beneficial owner. Revise tax return Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. Revise tax return   This form is used by a foreign person to: Establish foreign status; Claim that such person is the beneficial owner of the income for which the form is being furnished or a partner in a partnership subject to section 1446 withholding; and If applicable, claim a reduced rate of, or exemption from, withholding under an income tax treaty. Revise tax return   Form W-8BEN also may be used to claim that the foreign person is exempt from Form 1099 reporting and backup withholding for income that is not subject to NRA withholding. Revise tax return For example, a foreign person may provide a Form W-8BEN to a broker to establish that the gross proceeds from the sale of securities are not subject to Form 1099 reporting or backup withholding. Revise tax return Claiming treaty benefits. Revise tax return   You may apply a reduced rate of withholding to a foreign person that provides a Form W-8BEN claiming a reduced rate of withholding under an income tax treaty only if the person provides a U. Revise tax return S. Revise tax return TIN and certifies that: It is a resident of a treaty country; It is the beneficial owner of the income; If it is an entity, it derives the income within the meaning of section 894 of the Internal Revenue Code (it is not fiscally transparent); and It meets any limitation on benefits provision contained in the treaty, if applicable. Revise tax return   If the foreign beneficial owner claiming a treaty benefit is related to you, the foreign beneficial owner also must certify on Form W-8BEN that it will file Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), if the amount subject to NRA withholding received during a calendar year exceeds, in the aggregate, $500,000. Revise tax return   An entity derives income for which it is claiming treaty benefits only if the entity is not treated as fiscally transparent for that income. Revise tax return See Fiscally transparent entity discussed earlier under Flow-Through Entities. Revise tax return   Limitations on benefits provisions generally prohibit third country residents from obtaining treaty benefits. Revise tax return For example, a foreign corporation may not be entitled to a reduced rate of withholding unless a minimum percentage of its owners are citizens or residents of the United States or the treaty country. Revise tax return   The exemptions from, or reduced rates of, U. Revise tax return S. Revise tax return tax vary under each treaty. Revise tax return You must check the provisions of the tax treaty that apply. Revise tax return Tables at the end of this publication show the countries with which the United States has income tax treaties and the rates of withholding that apply in cases where all conditions of the particular treaty articles are satisfied. Revise tax return   If you know, or have reason to know, that an owner of income is not eligible for treaty benefits claimed, you must not apply the treaty rate. Revise tax return You are not, however, responsible for misstatements on a Form W-8, documentary evidence, or statements accompanying documentary evidence for which you did not have actual knowledge, or reason to know, that the statements were incorrect. Revise tax return Exceptions to TIN requirement. Revise tax return   A foreign person does not have to provide a TIN to claim a reduced rate of withholding under a treaty if the requirements for the following exceptions are met. Revise tax return Income from marketable securities (discussed next). Revise tax return Unexpected payments to an individual (discussed under U. Revise tax return S. Revise tax return Taxpayer Identification Numbers ). Revise tax return Marketable securities. Revise tax return   A Form W-8BEN provided to claim treaty benefits does not need a U. Revise tax return S. Revise tax return TIN if the foreign beneficial owner is claiming the benefits on income from marketable securities. Revise tax return For this purpose, income from a marketable security consists of the following items. Revise tax return Dividends and interest from stocks and debt obligations that are actively traded. Revise tax return Dividends from any redeemable security issued by an investment company registered under the Investment Company Act of 1940 (mutual fund). Revise tax return Dividends, interest, or royalties from units of beneficial interest in a unit investment trust that are (or were upon issuance) publicly offered and are registered with the SEC under the Securities Act of 1933. Revise tax return Income related to loans of any of the above securities. Revise tax return Offshore accounts. Revise tax return   If a payment is made outside the United States to an offshore account, a payee may give you documentary evidence, rather than Form W-8BEN. Revise tax return   In most cases, a payment is made outside the United States if you complete the acts necessary to effect the payment outside the United States. Revise tax return However, an amount paid by a bank or other financial institution on a deposit or account usually will be treated as paid at the branch or office where the amount is credited. Revise tax return An offshore account is an account maintained at an office or branch of a U. Revise tax return S. Revise tax return or foreign bank or other financial institution at any location outside the United States. Revise tax return   You may rely on documentary evidence given to you by a nonqualified intermediary or a flow-through entity with its Form W-8IMY. Revise tax return This rule applies even though you make the payment to a nonqualified intermediary or flow-through entity in the United States. Revise tax return In most cases, the nonqualified intermediary or flow-through entity that gives you documentary evidence also will have to give you a withholding statement, discussed later. Revise tax return Documentary evidence. Revise tax return   You may apply a reduced rate of withholding to income from marketable securities (discussed earlier) paid outside the United States to an offshore account if the beneficial owner gives you documentary evidence in place of a Form W-8BEN. Revise tax return To claim treaty benefits, the documentary evidence must be one of the following: A certificate of residence that: Is issued by a tax official of the treaty country of which the foreign beneficial owner claims to be a resident, States that the person has filed its most recent income tax return as a resident of that country, and Is issued within 3 years prior to being presented to you. Revise tax return Documentation for an individual that: Includes the individual's name, address, and photograph, Is an official document issued by an authorized governmental body, and Is issued no more than 3 years prior to being presented to you. Revise tax return Documentation for an entity that: Includes the name of the entity, Includes the address of its principal office in the treaty country, and Is an official document issued by an authorized governmental body. Revise tax return In addition to the documentary evidence, a foreign beneficial owner that is an entity must provide a statement that it derives the income for which it claims treaty benefits and that it meets one or more of the conditions set forth in a limitation on benefits article, if any, (or similar provision) contained in the applicable treaty. Revise tax return Form W-8ECI, Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States. Revise tax return   This form is used by a foreign person to: Establish foreign status, Claim that such person is the beneficial owner of the income for which the form is being furnished, and Claim that the income is effectively connected with the conduct of a trade or business in the United States. Revise tax return (See Effectively Connected Income , later. Revise tax return )   Effectively connected income for which a valid Form W-8ECI has been provided is generally not subject to NRA withholding. Revise tax return   If a partner submits this form to a partnership, the income claimed to be effectively connected with the conduct of a U. Revise tax return S. Revise tax return trade or business is subject to withholding under section 1446. Revise tax return If the partner has made, or will make, an election under section 871(d) or 882(d), the partner must submit Form W-8ECI, and attach a copy of the election, or a statement of intent to elect, to the form. Revise tax return    If the partner's only effectively connected income is the income allocated from the partnership and the partner is not making the election under section 871(d) or 882(d), the partner should provide Form W-8BEN to the partnership. Revise tax return Form W-8EXP, Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding. Revise tax return   This form is used by a foreign government, international organization, foreign central bank of issue, foreign tax-exempt organization, foreign private foundation, or government of a U. Revise tax return S. Revise tax return possession to: Establish foreign status, Claim that such person is the beneficial owner of the income for which the form is being furnished, and Claim a reduced rate of, or an exemption from, withholding as such an entity. Revise tax return   If the government or organization is a partner in a partnership carrying on a trade or business in the United States, the effectively connected income allocable to the partner is subject to withholding under section 1446. Revise tax return   See Foreign Governments and Certain Other Foreign Organizations , later. Revise tax return Foreign Intermediaries and Foreign Flow-Through Entities Payments made to a foreign intermediary or foreign flow-through entity are treated as made to the payees on whose behalf the intermediary or entity acts. Revise tax return The Form W-8IMY provided by a foreign intermediary or flow-through entity must be accompanied by additional information for you to be able to reliably associate the payment with a payee. Revise tax return The additional information required depends on the type of intermediary or flow-through entity and the extent of the withholding responsibilities it assumes. Revise tax return Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U. Revise tax return S. Revise tax return Branches for United States Tax Withholding. Revise tax return   This form is used by foreign intermediaries and foreign flow-through entities, as well as certain U. Revise tax return S. Revise tax return branches, to: Represent that a foreign person is a qualified intermediary or nonqualified intermediary, Represent, if applicable, that the qualified intermediary is assuming primary NRA withholding responsibility and/or primary Form 1099 reporting and backup withholding responsibility, Represent that a foreign partnership or a foreign simple or grantor trust is a withholding foreign partnership or a withholding foreign trust, Represent that a foreign flow-through entity is a nonwithholding foreign partnership, or a nonwithholding foreign trust and that the income is not effectively connected with the conduct of a trade or business in the United States, Represent that the provider is a U. Revise tax return S. Revise tax return branch of a foreign bank or insurance company and either is agreeing to be treated as a U. Revise tax return S. Revise tax return person or is transmitting documentation of the persons on whose behalf it is acting, or Represent that, for purposes of section 1446, it is an upper-tier foreign partnership or a foreign grantor trust and that the form is being used to transmit the required documentation. Revise tax return For information on qualifying as an upper-tier foreign partnership, see Regulations section 1. Revise tax return 1446-5. Revise tax return Qualified Intermediaries In most cases, a QI is any foreign intermediary that has entered into a QI withholding agreement (discussed earlier) with the IRS. Revise tax return A foreign intermediary that has received a QI employer identification number (QI-EIN) may represent on Form W-8IMY that it is a QI before it receives a fully executed agreement. Revise tax return The intermediary can claim that it is a QI until the IRS revokes its QI-EIN. Revise tax return The IRS will revoke a QI-EIN if the QI agreement is not executed and returned to the IRS within a reasonable period of time after the agreement was sent to the intermediary for signature. Revise tax return Responsibilities. Revise tax return   Payments made to a QI that does not assume NRA withholding responsibility are treated as paid to its account holders and customers. Revise tax return However, a QI is not required to provide you with documentation it obtains from its foreign account holders and customers. Revise tax return Instead, it provides you with a withholding statement that contains withholding rate pool information. Revise tax return A withholding rate pool is a payment of a single type of income, determined in accordance with the categories of income reported on Form 1042-S that is subject to a single rate of withholding. Revise tax return A qualified intermediary is required to provide you with information regarding U. Revise tax return S. Revise tax return persons subject to Form 1099 reporting and to provide you withholding rate pool information separately for each such U. Revise tax return S. Revise tax return person unless it has assumed Form 1099 reporting and backup withholding responsibility. Revise tax return For the alternative procedure for providing rate pool information for U. Revise tax return S. Revise tax return non-exempt persons, see the Form W-8IMY instructions. Revise tax return   The withholding statement must: Designate those accounts for which it acts as a qualified intermediary, Designate those accounts for which it assumes primary NRA withholding responsibility and/or primary Form 1099 and backup withholding responsibility, and Provide sufficient information for you to allocate the payment to a withholding rate pool. Revise tax return   The extent to which you must have withholding rate pool information depends on the withholding and reporting obligations assumed by the QI. Revise tax return Primary responsibility not assumed. Revise tax return   If a QI does not assume primary NRA withholding responsibility or primary Form 1099 reporting and backup withholding responsibility for the payment, you can reliably associate the payment with valid documentation only to the extent you can reliably determine the part of the payment that relates to each withholding rate pool for foreign payees. Revise tax return Unless the alternative procedure applies, the qualified intermediary must provide you with a separate withholding rate pool for each U. Revise tax return S. Revise tax return person subject to Form 1099 reporting and/or backup withholding. Revise tax return The QI must provide a Form W-9 or, in the absence of the form, the name, address, and TIN, if available, for such person. Revise tax return Primary NRA withholding responsibility assumed. Revise tax return   If you make a payment to a QI that assumes primary NRA withholding responsibility (but not primary Form 1099 reporting and backup withholding responsibility), you can reliably associate the payment with valid documentation only to the extent you can reliably determine the part of the payment that relates to the withholding rate pool for which the QI assumes primary NRA withholding responsibility and the part of the payment attributable to withholding rate pools for each U. Revise tax return S. Revise tax return person, unless the alternative procedure applies, subject to Form 1099 reporting and/or backup withholding. Revise tax return The QI must provide a Form W-9 or, in the absence of the form, the name, address, and TIN, if available, for such person. Revise tax return Primary NRA and Form 1099 responsibility assumed. Revise tax return   If you make a payment to a QI that assumes both primary NRA withholding responsibility and primary Form 1099 reporting and backup withholding responsibility, you can reliably associate a payment with valid documentation provided that you receive a valid Form W-8IMY. Revise tax return It is not necessary to associate the payment with withholding rate pools. Revise tax return Example. Revise tax return You make a payment of dividends to a QI. Revise tax return It has five customers: two are foreign persons who have provided documentation entitling them to a 15% rate of withholding on dividends; two are foreign persons subject to a 30% rate of withholding on dividends; and one is a U. Revise tax return S. Revise tax return individual who provides it with a Form W-9. Revise tax return Each customer is entitled to 20% of the dividend payment. Revise tax return The QI does not assume any primary withholding responsibility. Revise tax return The QI gives you a Form W-8IMY with which it associates the Form W-9 and a withholding statement that allocates 40% of the dividend to a 15% withholding rate pool, 40% to a 30% withholding rate pool, and 20% to the U. Revise tax return S. Revise tax return individual. Revise tax return You should report on Forms 1042-S 40% of the payment as made to a 15% rate dividend pool and 40% of the payment as made to a 30% rate dividend pool. Revise tax return The part of the payment allocable to the U. Revise tax return S. Revise tax return individual (20%) is reportable on Form 1099-DIV. Revise tax return Smaller partnerships and trusts. Revise tax return   A QI may apply special rules to a smaller partnership or trust (Joint Account Provision) only if the partnership or trust meets the following conditions. Revise tax return It is a foreign partnership or foreign simple or grantor trust. Revise tax return It is a direct account holder of the QI. Revise tax return It does not have any partner, beneficiary, or owner that is a U. Revise tax return S. Revise tax return person or a pass- through partner, beneficiary, or owner. Revise tax return   For information on these rules, see section 4A. Revise tax return 01 of the QI agreement. Revise tax return This is found in Appendix 3 of Revenue Procedure 2003-64. Revise tax return Also see Revenue Procedure 2004-21. Revise tax return Related partnerships and trusts. Revise tax return    A QI may apply special rules to a related partnership or trust only if the partnership or trust meets the following conditions. Revise tax return It is a foreign partnership or foreign simple or grantor trust. Revise tax return It is either: A direct account holder of the QI, or An indirect account holder of the QI that is a direct partner, beneficiary, or owner of a partnership or trust to which the QI has applied this rule. Revise tax return For information on these rules, see section 4A. Revise tax return 02 of the QI agreement. Revise tax return This is found in Appendix 3 of Revenue Procedure 2003-64. Revise tax return Also see Revenue Procedure 2005-77. Revise tax return Nonqualified Intermediaries If you are making a payment to an NQI, foreign flow-through entity, or U. Revise tax return S. Revise tax return branch that is using Form W-8IMY to transmit information about the branch's account holders or customers, you can treat the payment (or a part of the payment) as reliably associated with valid documentation from a specific payee only if, prior to making the payment: You can allocate the payment to a valid Form W-8IMY, You can reliably determine how much of the payment relates to valid documentation provided by a payee (a person that is not itself a foreign intermediary, flow- through entity, or U. Revise tax return S. Revise tax return branch), and You have sufficient information to report the payment on Form 1042-S or Form 1099, if reporting is required. Revise tax return The NQI, flow-through entity, or U. Revise tax return S. Revise tax return branch must give you certain information on a withholding statement that is associated with the Form W-8IMY. Revise tax return A withholding statement must be updated to keep the information accurate prior to each payment. Revise tax return Withholding statement. Revise tax return   In most cases, a withholding statement must contain the following information. Revise tax return The name, address, and TIN (if any, or if required) of each person for whom documentation is provided. Revise tax return The type of documentation (documentary evidence, Form W-8, or Form W-9) for every person for whom documentation has been provided. Revise tax return The status of the person for whom the documentation has been provided, such as whether the person is a U. Revise tax return S. Revise tax return exempt recipient (U. Revise tax return S. Revise tax return person exempt from Form 1099 reporting), U. Revise tax return S. Revise tax return non-exempt recipient (U. Revise tax return S. Revise tax return person subject to Form 1099 reporting), or a foreign person. Revise tax return For a foreign person, the statement must indicate whether the person is a beneficial owner or a foreign intermediary, flow-through entity, or a U. Revise tax return S. Revise tax return branch. Revise tax return The type of recipient the person is, based on the recipient codes used on Form 1042-S. Revise tax return Information allocating each payment, by income type, to each payee (including U. Revise tax return S. Revise tax return exempt and U. Revise tax return S. Revise tax return non-exempt recipients) for whom documentation has been provided. Revise tax return The rate of withholding that applies to each foreign person to whom a payment is allocated. Revise tax return A foreign payee's country of residence. Revise tax return If a reduced rate of withholding is claimed, the basis for a reduced rate of withholding (for example, portfolio interest, treaty benefit, etc. Revise tax return ). Revise tax return In the case of treaty benefits claimed by entities, whether the applicable limitation on benefits statement and the statement that the foreign person derives the income for which treaty benefits are claimed, have been made. Revise tax return The name, address, and TIN (if any) of any other NQI, flow-through entity, or U. Revise tax return S. Revise tax return branch from which the payee will directly receive a payment. Revise tax return Any other information a withholding agent requests to fulfill its reporting and withholding obligations. Revise tax return Alternative procedure. Revise tax return   Under this alternative procedure the NQI can give you the information that allocates each payment to each foreign and U. Revise tax return S. Revise tax return exempt recipient by January 31 following the calendar year of payment, rather than prior to the payment being made as otherwise required. Revise tax return To take advantage of this procedure, the NQI must: (a) inform you, on its withholding statement, that it is using the alternative procedure; and (b) obtain your consent. Revise tax return You must receive the withholding statement with all the required information (other than item 5) prior to making the payment. Revise tax return    This alternative procedure cannot be used for payments to U. Revise tax return S. Revise tax return non-exempt recipients. Revise tax return Therefore, an NQI must always provide you with allocation information for all U. Revise tax return S. Revise tax return non-exempt recipients prior to a payment being made. Revise tax return Pooled withholding information. Revise tax return   If an NQI uses the alternative procedure, it must provide you with withholding rate pool information, as opposed to individual allocation information, prior to the payment of a reportable amount. Revise tax return A withholding rate pool is a payment of a single type of income (as determined by the income categories on Form 1042-S) that is subject to a single rate of withholding. Revise tax return For example, an NQI that has foreign account holders receiving royalties and dividends, both subject to the 15% rate, will provide you with information for two withholding rate pools (one for royalties and one for dividends). Revise tax return The NQI must provide you with the payee specific allocation information (information allocating each payment to each payee) by January 31 following the calendar year of payment. Revise tax return Failure to provide allocation information. Revise tax return   If an NQI fails to provide you with the payee specific allocation information for a withholding rate pool by January 31, you must not apply the alternative procedure to any of the NQI's withholding rate pools from that date forward. Revise tax return You must treat the payees as undocumented and apply the presumption rules, discussed later in Presumption Rules . Revise tax return An NQI is deemed to have f
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The Oak Ridge National Laboratory, the Department of Energy's largest multi-purpose national laboratory, conducts world-leading research in advanced materials exploration, alternative fuels, climate change, and supercomputing.

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The Revise Tax Return

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