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Free Amended Tax Return Online

Free amended tax return online 3. Free amended tax return online   Adjustments to Income Table of Contents Individual Retirement Arrangement (IRA) Contributions and DeductionsContributions to Kay Bailey Hutchison Spousal IRAs. Free amended tax return online Deductible contribution. Free amended tax return online Nondeductible contribution. Free amended tax return online You may be able to subtract amounts from your total income (Form 1040, line 22 or Form 1040A, line 15) or total effectively connected income (Form 1040NR, line 23) to get your adjusted gross income (Form 1040, line 37; Form 1040A, line 21; or Form 1040NR, line 36). Free amended tax return online Some adjustments to income follow. Free amended tax return online Contributions to your individual retirement arrangement (IRA) (Form 1040, line 32; Form 1040A, line 17; or Form 1040NR, line 32), explained later in this publication. Free amended tax return online Certain moving expenses (Form 1040, line 26; or Form 1040NR, line 26) if you changed job locations or started a new job in 2013. Free amended tax return online See Publication 521, Moving Expenses, or see Form 3903, Moving Expenses, and its instructions. Free amended tax return online Some health insurance costs (Form 1040, line 29 or Form 1040NR, line 29) if you were self-employed and had a net profit for the year, or if you received wages in 2013 from an S corporation in which you were a more-than-2% shareholder. Free amended tax return online For more details, see Publication 535, Business Expenses. Free amended tax return online Payments to your self-employed SEP, SIMPLE, or qualified plan (Form 1040, line 28 or Form 1040NR, line 28). Free amended tax return online For more information, including limits on how much you can deduct, see Publication 560, Retirement Plans for Small Business. Free amended tax return online Penalties paid on early withdrawal of savings (Form 1040, line 30 or Form 1040NR, line 30). Free amended tax return online Form 1099-INT, Interest Income, or Form 1099-OID, Original Issue Discount, will show the amount of any penalty you were charged. Free amended tax return online Alimony payments (Form 1040, line 31a). Free amended tax return online For more information, see Publication 504, Divorced or Separated Individuals. Free amended tax return online There are other items you can claim as adjustments to income. Free amended tax return online These adjustments are discussed in your tax return instructions. Free amended tax return online Individual Retirement Arrangement (IRA) Contributions and Deductions This section explains the tax treatment of amounts you pay into traditional IRAs. Free amended tax return online A traditional IRA is any IRA that is not a Roth or SIMPLE IRA. Free amended tax return online Roth and SIMPLE IRAs are defined earlier in the IRA discussion under Retirement Plan Distributions . Free amended tax return online For more detailed information, see Publication 590. Free amended tax return online Contributions. Free amended tax return online   An IRA is a personal savings plan that offers you tax advantages to set aside money for your retirement. Free amended tax return online Two advantages of a traditional IRA are: You may be able to deduct some or all of your contributions to it, depending on your circumstances, and Generally, amounts in your IRA, including earnings and gains, are not taxed until distributed. Free amended tax return online    Although interest earned from your traditional IRA generally is not taxed in the year earned, it is not tax-exempt interest. Free amended tax return online Do not report this interest on your tax return as tax-exempt interest. Free amended tax return online General limit. Free amended tax return online   The most that can be contributed for 2013 to your traditional IRA is the smaller of the following amounts. Free amended tax return online Your taxable compensation for the year, or $5,500 ($6,500 if you were age 50 or older by the end of 2013). Free amended tax return online Contributions to Kay Bailey Hutchison Spousal IRAs. Free amended tax return online   In the case of a married couple filing a joint return for 2013, up to $5,500 ($6,500 for each spouse age 50 or older by the end of 2013) can be contributed to IRAs on behalf of each spouse, even if one spouse has little or no compensation. Free amended tax return online For more information on the general limit and the Kay Bailey Hutchison Spousal IRA limit, see How Much Can Be Contributed? in Publication 590. Free amended tax return online Deductible contribution. Free amended tax return online   Generally, you can deduct the lesser of the contributions to your traditional IRA for the year or the general limit (or Kay Bailey Hutchison Spousal IRA limit, if applicable) just explained. Free amended tax return online However, if you or your spouse was covered by an employer retirement plan at any time during the year for which contributions were made, you may not be able to deduct all of the contributions. Free amended tax return online Your deduction may be reduced or eliminated, depending on your filing status and the amount of your income. Free amended tax return online For more information, see Limit if Covered by Employer Plan in Publication 590. Free amended tax return online Nondeductible contribution. Free amended tax return online   The difference between your total permitted contributions and your IRA deduction, if any, is your nondeductible contribution. Free amended tax return online You must file Form 8606, Nondeductible IRAs, to report nondeductible contributions even if you do not have to file a tax return for the year. Free amended tax return online    For 2014, the most that can be contributed to your traditional IRA is $5,500 ($6,500 if you are age 50 or older at the end of 2014). Free amended tax return online Prev  Up  Next   Home   More Online Publications
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The Free Amended Tax Return Online

Free amended tax return online 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. Free amended tax return online S. Free amended tax return online Taxpayer Identification NumbersUnexpected payment. Free amended tax return online Depositing Withheld TaxesWhen Deposits Are Required Adjustment for Overwithholding Returns RequiredJoint owners. Free amended tax return online Electronic reporting. Free amended tax return online Partnership Withholding on Effectively Connected IncomeWho Must Withhold Foreign Partner Publicly Traded Partnerships U. Free amended tax return online S. Free amended tax return online Real Property InterestForeign corporations. Free amended tax return online Domestic corporations. Free amended tax return online U. Free amended tax return online S. Free amended tax return online real property holding corporations. Free amended tax return online Partnerships. Free amended tax return online Trusts and estates. Free amended tax return online Domestically controlled QIE. Free amended tax return online Late filing of certifications or notices. Free amended tax return online Certifications. Free amended tax return online Liability of agent or qualified substitute. Free amended tax return online Reporting and Paying the Tax Withholding Certificates Tax Treaty TablesTable 1 Table 2 Table 3 How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Free amended tax return online Withholding of Tax In most cases, a foreign person is subject to U. Free amended tax return online S. Free amended tax return online tax on its U. Free amended tax return online S. Free amended tax return online source income. Free amended tax return online Most types of U. Free amended tax return online S. Free amended tax return online source income received by a foreign person are subject to U. Free amended tax return online S. Free amended tax return online tax of 30%. Free amended tax return online 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. Free amended tax return online The tax is generally withheld (NRA withholding) from the payment made to the foreign person. Free amended tax return online 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. Free amended tax return online In most cases, NRA withholding describes the withholding regime that requires withholding on a payment of U. Free amended tax return online S. Free amended tax return online source income. Free amended tax return online Payments to foreign persons, including nonresident alien individuals, foreign entities, and governments, may be subject to NRA withholding. Free amended tax return online NRA withholding does not include withholding under section 1445 of the Code (see U. Free amended tax return online S. Free amended tax return online Real Property Interest, later) or under section 1446 of the Code (see Partnership Withholding on Effectively Connected Income , later). Free amended tax return online A withholding agent (defined next) is the person responsible for withholding on payments made to a foreign person. Free amended tax return online However, a withholding agent that can reliably associate the payment with documentation (discussed later) from a U. Free amended tax return online S. Free amended tax return online person is not required to withhold. Free amended tax return online 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. Free amended tax return online Withholding Agent You are a withholding agent if you are a U. Free amended tax return online S. Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online S. Free amended tax return online branch of certain foreign banks and insurance companies. Free amended tax return online 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. Free amended tax return online Although several persons may be withholding agents for a single payment, the full tax is required to be withheld only once. Free amended tax return online In most cases, the U. Free amended tax return online S. Free amended tax return online person who pays an amount subject to NRA withholding is the person responsible for withholding. Free amended tax return online However, other persons may be required to withhold. Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online Liability for tax. Free amended tax return online   As a withholding agent, you are personally liable for any tax required to be withheld. Free amended tax return online This liability is independent of the tax liability of the foreign person to whom the payment is made. Free amended tax return online If you fail to withhold and the foreign payee fails to satisfy its U. Free amended tax return online S. Free amended tax return online tax liability, then both you and the foreign person are liable for tax, as well as interest and any applicable penalties. Free amended tax return online   The applicable tax will be collected only once. Free amended tax return online If the foreign person satisfies its U. Free amended tax return online S. Free amended tax return online tax liability, you are not liable for the tax but remain liable for any interest and penalties for failure to withhold. Free amended tax return online Determination of amount to withhold. Free amended tax return online   You must withhold on the gross amount subject to NRA withholding. Free amended tax return online You cannot reduce the gross amount by any deductions. Free amended tax return online However, see Scholarships and Fellowship Grants and Pay for Personal Services Performed , later, for when a deduction for a personal exemption may be allowed. Free amended tax return online   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. Free amended tax return online In no case, however, should you withhold more than 30% of the total amount paid. Free amended tax return online Or, you may make a reasonable estimate of the amount from U. Free amended tax return online S. Free amended tax return online sources and put a corresponding part of the amount due in escrow until the amount from U. Free amended tax return online S. Free amended tax return online sources can be determined, at which time withholding becomes due. Free amended tax return online When to withhold. Free amended tax return online   Withholding is required at the time you make a payment of an amount subject to withholding. Free amended tax return online 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. Free amended tax return online A payment is considered made to a person if it is paid for that person's benefit. Free amended tax return online 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. Free amended tax return online A payment also is considered made to a person if it is made to that person's agent. Free amended tax return online   A U. Free amended tax return online S. Free amended tax return online partnership should withhold when any distributions that include amounts subject to withholding are made. Free amended tax return online However, if a foreign partner's distributive share of income subject to withholding is not actually distributed, the U. Free amended tax return online S. Free amended tax return online 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. Free amended tax return online If the distributable amount consists of effectively connected income, see Partnership Withholding on Effectively Connected Income , later. Free amended tax return online A U. Free amended tax return online S. Free amended tax return online 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. Free amended tax return online To the extent a U. Free amended tax return online S. Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online (See Returns Required , later. Free amended tax return online ) 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. Free amended tax return online Form 1099 reporting and backup withholding. Free amended tax return online    You also may be responsible as a payer for reporting on Form 1099 payments made to a U. Free amended tax return online S. Free amended tax return online person. Free amended tax return online You must withhold 28% (backup withholding rate) from a reportable payment made to a U. Free amended tax return online S. Free amended tax return online person that is subject to Form 1099 reporting if any of the following apply. Free amended tax return online The U. Free amended tax return online S. Free amended tax return online person has not provided its taxpayer identification number (TIN) in the manner required. Free amended tax return online The IRS notifies you that the TIN furnished by the payee is incorrect. Free amended tax return online There has been a notified payee underreporting. Free amended tax return online There has been a payee certification failure. Free amended tax return online In most cases, a TIN must be provided by a U. Free amended tax return online S. Free amended tax return online non-exempt recipient on Form W-9, Request for Taxpayer Identification Number and Certification. Free amended tax return online A payer files a tax return on Form 945, Annual Return of Withheld Federal Income Tax, for backup withholding. Free amended tax return online 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. Free amended tax return online S. Free amended tax return online person. Free amended tax return online For example, you are required to report income paid to a foreign intermediary or flow-through entity that collects for a U. Free amended tax return online S. Free amended tax return online person subject to Form 1099 reporting. Free amended tax return online See Identifying the Payee , later, for more information. Free amended tax return online Also see Section S. Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online Wages paid to employees. Free amended tax return online   If you are the employer of a nonresident alien, you generally must withhold taxes at graduated rates. Free amended tax return online See Pay for Personal Services Performed , later. Free amended tax return online Effectively connected income by partnerships. Free amended tax return online   A withholding agent that is a partnership (whether U. Free amended tax return online S. Free amended tax return online or foreign) is also responsible for withholding on its income effectively connected with a U. Free amended tax return online S. Free amended tax return online trade or business that is allocable to foreign partners. Free amended tax return online See Partnership Withholding on Effectively Connected Income , later, for more information. Free amended tax return online U. Free amended tax return online S. Free amended tax return online real property interest. Free amended tax return online   A withholding agent also may be responsible for withholding if a foreign person transfers a U. Free amended tax return online S. Free amended tax return online real property interest to the agent, or if it is a corporation, partnership, trust, or estate that distributes a U. Free amended tax return online S. Free amended tax return online real property interest to a shareholder, partner, or beneficiary that is a foreign person. Free amended tax return online See U. Free amended tax return online S. Free amended tax return online Real Property Interest , later. Free amended tax return online Persons Subject to NRA Withholding NRA withholding applies only to payments made to a payee that is a foreign person. Free amended tax return online It does not apply to payments made to U. Free amended tax return online S. Free amended tax return online persons. Free amended tax return online Usually, you determine the payee's status as a U. Free amended tax return online S. Free amended tax return online or foreign person based on the documentation that person provides. Free amended tax return online See Documentation , later. Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online However, there are situations in which the payee is a person other than the one to whom you actually make a payment. Free amended tax return online U. Free amended tax return online S. Free amended tax return online agent of foreign person. Free amended tax return online   If you make a payment to a U. Free amended tax return online S. Free amended tax return online person and you have actual knowledge that the U. Free amended tax return online S. Free amended tax return online person is receiving the payment as an agent of a foreign person, you must treat the payment as made to the foreign person. Free amended tax return online However, if the U. Free amended tax return online S. Free amended tax return online 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. Free amended tax return online   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. Free amended tax return online S. Free amended tax return online person and not as a payment to a foreign person. Free amended tax return online You may be required to report the payment on Form 1099 and, if applicable, backup withhold. Free amended tax return online Disregarded entities. Free amended tax return online   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. Free amended tax return online The payee of a payment made to a disregarded entity is the owner of the entity. Free amended tax return online   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. Free amended tax return online   If the owner is a U. Free amended tax return online S. Free amended tax return online person, you do not apply NRA withholding. Free amended tax return online However, you may be required to report the payment on Form 1099 and, if applicable, backup withhold. Free amended tax return online 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. Free amended tax return online Flow-Through Entities The payees of payments (other than income effectively connected with a U. Free amended tax return online S. Free amended tax return online trade or business) made to a foreign flow-through entity are the owners or beneficiaries of the flow-through entity. Free amended tax return online This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. Free amended tax return online Income that is, or is deemed to be, effectively connected with the conduct of a U. Free amended tax return online S. Free amended tax return online trade or business of a flow-through entity is treated as paid to the entity. Free amended tax return online All of the following are flow-through entities. Free amended tax return online A foreign partnership (other than a withholding foreign partnership). Free amended tax return online A foreign simple or foreign grantor trust (other than a withholding foreign trust). Free amended tax return online A fiscally transparent entity receiving income for which treaty benefits are claimed. Free amended tax return online See Fiscally transparent entity , later. Free amended tax return online 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. Free amended tax return online You also may be required to treat the entity as a flow-through entity under the presumption rules, discussed later. Free amended tax return online You must determine whether the owners or beneficiaries of a flow-through entity are U. Free amended tax return online S. Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online See Documentation and Presumption Rules , later. Free amended tax return online Withholding foreign partnerships and withholding foreign trusts are not flow-through entities. Free amended tax return online Foreign partnerships. Free amended tax return online    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. Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online Example 1. Free amended tax return online A nonwithholding foreign partnership has three partners: a nonresident alien individual; a foreign corporation; and a U. Free amended tax return online S. Free amended tax return online citizen. Free amended tax return online You make a payment of U. Free amended tax return online S. Free amended tax return online source interest to the partnership. Free amended tax return online 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. Free amended tax return online S. Free amended tax return online citizen. Free amended tax return online The partnership also gives you a complete withholding statement that enables you to associate a part of the interest payment to each partner. Free amended tax return online You must treat all three partners as the payees of the interest payment as if the payment were made directly to them. Free amended tax return online Report the payment to the nonresident alien and the foreign corporation on Forms 1042-S. Free amended tax return online Report the payment to the U. Free amended tax return online S. Free amended tax return online citizen on Form 1099-INT. Free amended tax return online Example 2. Free amended tax return online A nonwithholding foreign partnership has two partners: a foreign corporation and a nonwithholding foreign partnership. Free amended tax return online The second partnership has two partners, both nonresident alien individuals. Free amended tax return online You make a payment of U. Free amended tax return online S. Free amended tax return online source interest to the first partnership. Free amended tax return online 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. Free amended tax return online In addition, Forms W-8BEN from the partners are associated with the Form W-8IMY from the second partnership. Free amended tax return online The Forms W-8IMY from the partnerships have complete withholding statements associated with them. Free amended tax return online 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. Free amended tax return online Example 3. Free amended tax return online You make a payment of U. Free amended tax return online S. Free amended tax return online source dividends to a withholding foreign partnership. Free amended tax return online The partnership has two partners, both foreign corporations. Free amended tax return online 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. Free amended tax return online You must treat the partnership as the payee of the dividends. Free amended tax return online Foreign simple and grantor trust. Free amended tax return online   A trust is foreign unless it meets both of the following tests. Free amended tax return online A court within the United States is able to exercise primary supervision over the administration of the trust. Free amended tax return online One or more U. Free amended tax return online S. Free amended tax return online persons have the authority to control all substantial decisions of the trust. Free amended tax return online   In most cases, a foreign simple trust is a foreign trust that is required to distribute all of its income annually. Free amended tax return online A foreign grantor trust is a foreign trust that is treated as a grantor trust under sections 671 through 679 of the Code. Free amended tax return online   The payees of a payment made to a foreign simple trust are the beneficiaries of the trust. Free amended tax return online The payees of a payment made to a foreign grantor trust are the owners of the trust. Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online Example. Free amended tax return online A foreign simple trust has three beneficiaries: two nonresident alien individuals and a U. Free amended tax return online S. Free amended tax return online citizen. Free amended tax return online You make a payment of interest to the foreign trust. Free amended tax return online 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. Free amended tax return online S. Free amended tax return online citizen. Free amended tax return online 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. Free amended tax return online You must treat all three beneficiaries as the payees of the interest payment as if the payment were made directly to them. Free amended tax return online Report the payment to the nonresident aliens on Forms 1042-S. Free amended tax return online Report the payment to the U. Free amended tax return online S. Free amended tax return online citizen on Form 1099-INT. Free amended tax return online Fiscally transparent entity. Free amended tax return online   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. Free amended tax return online 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. Free amended tax return online ). Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online   The payees of a payment made to a fiscally transparent entity are the interest holders of the entity. Free amended tax return online Example. Free amended tax return online 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. Free amended tax return online A has two interest holders, B and C. Free amended tax return online B is a corporation organized under the laws of country Y. Free amended tax return online C is a corporation organized under the laws of country Z. Free amended tax return online Both countries Y and Z have an income tax treaty in force with the United States. Free amended tax return online A receives royalty income from U. Free amended tax return online S. Free amended tax return online sources that is not effectively connected with the conduct of a trade or business in the United States. Free amended tax return online For U. Free amended tax return online S. Free amended tax return online income tax purposes, A is treated as a partnership. Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online Accordingly, A is fiscally transparent in its jurisdiction, country X. Free amended tax return online B and C are not fiscally transparent under the laws of their respective countries of incorporation. Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online S. Free amended tax return online source royalty income for purposes of the U. Free amended tax return online S. Free amended tax return online -Y income tax treaty. Free amended tax return online 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. Free amended tax return online Therefore, A is not treated as fiscally transparent under the laws of country Z. Free amended tax return online Accordingly, C is not treated as deriving its share of the U. Free amended tax return online S. Free amended tax return online source royalty income for purposes of the U. Free amended tax return online S. Free amended tax return online -Z income tax treaty. Free amended tax return online 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. Free amended tax return online This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. Free amended tax return online 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. Free amended tax return online An intermediary is a custodian, broker, nominee, or any other person that acts as an agent for another person. Free amended tax return online A foreign intermediary is either a qualified intermediary or a nonqualified intermediary. Free amended tax return online 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. Free amended tax return online You must determine whether the customers or account holders of a foreign intermediary are U. Free amended tax return online S. Free amended tax return online or foreign persons and, if the account holder or customer is foreign, whether a reduced rate of NRA withholding applies. Free amended tax return online You make these determinations based on the foreign intermediary's Form W-8IMY and associated information and documentation. Free amended tax return online 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. Free amended tax return online See Documentation and Presumption Rules , later. Free amended tax return online Nonqualified intermediary. Free amended tax return online   A nonqualified intermediary (NQI) is any intermediary that is a foreign person and that is not a qualified intermediary. Free amended tax return online The payees of a payment made to an NQI are the customers or account holders on whose behalf the NQI is acting. Free amended tax return online Example. Free amended tax return online You make a payment of interest to a foreign bank that is a nonqualified intermediary. Free amended tax return online 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. Free amended tax return online S. Free amended tax return online person for whom the bank is collecting the payments. Free amended tax return online 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. Free amended tax return online The account holders are the payees of the interest payment. Free amended tax return online 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. Free amended tax return online S. Free amended tax return online person on Form 1099-INT. Free amended tax return online Qualified intermediary. Free amended tax return online   A qualified intermediary (QI) is any foreign intermediary (or foreign branch of a U. Free amended tax return online S. Free amended tax return online intermediary) that has entered into a qualified intermediary withholding agreement (discussed later) with the IRS. Free amended tax return online 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. Free amended tax return online In this situation, the QI is required to withhold the tax. Free amended tax return online You can determine whether a QI has assumed responsibility from the Form W-8IMY provided by the QI. Free amended tax return online   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. Free amended tax return online 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. Free amended tax return online S. Free amended tax return online person. Free amended tax return online Branches of financial institutions. Free amended tax return online   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. Free amended tax return online The countries with approved KYC rules are listed on IRS. Free amended tax return online gov. Free amended tax return online QI withholding agreement. Free amended tax return online   Foreign financial institutions and foreign branches of U. Free amended tax return online S. Free amended tax return online financial institutions can enter into an agreement with the IRS to be a qualified intermediary. Free amended tax return online   A QI is entitled to certain simplified withholding and reporting rules. Free amended tax return online In general, there are three major areas whereby intermediaries with QI status are afforded such simplified treatment. Free amended tax return online   To apply for QI status, complete Form 14345, Qualified Intermediary Application, and Form SS-4, Application for Employer Identification Number. Free amended tax return online These forms, and the procedures required to obtain a QI withholding agreement are available at www. Free amended tax return online irs. Free amended tax return online gov/Businesses/Corporations/Qualified-Intermediaries-(QI). Free amended tax return online Documentation. Free amended tax return online   A QI is not required to forward documentation obtained from foreign account holders to the U. Free amended tax return online S. Free amended tax return online withholding agent from whom the QI receives a payment of U. Free amended tax return online S. Free amended tax return online source income. Free amended tax return online The QI maintains such documentation at its location and provides the U. Free amended tax return online S. Free amended tax return online withholding agent with withholding rate pools. Free amended tax return online A withholding rate pool is a payment of a single type of income that is subject to a single rate of withholding. Free amended tax return online   A QI is required to provide the U. Free amended tax return online S. Free amended tax return online withholding agent with information regarding U. Free amended tax return online S. Free amended tax return online persons subject to Form 1099 information reporting unless the QI assumes the primary obligation to do Form 1099 reporting and backup withholding. Free amended tax return online   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. Free amended tax return online 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. Free amended tax return online Form 1042-S reporting. Free amended tax return online   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. Free amended tax return online Pooled basis reporting is not available for payments to certain account holders, such as a nonqualified intermediary or a flow-through entity (discussed earlier). Free amended tax return online Collective refund procedures. Free amended tax return online   A QI may seek a refund on behalf of its direct account holders. Free amended tax return online 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. Free amended tax return online U. Free amended tax return online S. Free amended tax return online branches of foreign banks and foreign insurance companies. Free amended tax return online   Special rules apply to a U. Free amended tax return online S. Free amended tax return online branch of a foreign bank subject to Federal Reserve Board supervision or a foreign insurance company subject to state regulatory supervision. Free amended tax return online If you agree to treat the branch as a U. Free amended tax return online S. Free amended tax return online person, you may treat the branch as a U. Free amended tax return online S. Free amended tax return online payee for a payment subject to NRA withholding provided you receive a Form W-8IMY from the U. Free amended tax return online S. Free amended tax return online branch on which the agreement is evidenced. Free amended tax return online If you treat the branch as a U. Free amended tax return online S. Free amended tax return online payee, you are not required to withhold. Free amended tax return online Even though you agree to treat the branch as a U. Free amended tax return online S. Free amended tax return online person, you must report the payment on Form 1042-S. Free amended tax return online   A financial institution organized in a U. Free amended tax return online S. Free amended tax return online possession is treated as a U. Free amended tax return online S. Free amended tax return online branch. Free amended tax return online The special rules discussed in this section apply to a possessions financial institution. Free amended tax return online   If you are paying a U. Free amended tax return online S. Free amended tax return online 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. Free amended tax return online S. Free amended tax return online person for amounts subject to NRA withholding. Free amended tax return online Consequently, amounts not subject to NRA withholding that are paid to a U. Free amended tax return online S. Free amended tax return online branch are not subject to Form 1099 reporting or backup withholding. Free amended tax return online   Alternatively, a U. Free amended tax return online S. Free amended tax return online branch may provide you with a Form W-8IMY with which it associates the documentation of the persons on whose behalf it acts. Free amended tax return online 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. Free amended tax return online See Nonqualified Intermediaries under  Documentation, later. Free amended tax return online   If the U. Free amended tax return online S. Free amended tax return online 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. Free amended tax return online Withholding foreign partnership and foreign trust. Free amended tax return online   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. Free amended tax return online 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. Free amended tax return online   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. Free amended tax return online A WP or WT acting in that capacity must assume NRA withholding responsibility for these amounts. Free amended tax return online 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. Free amended tax return online WP and WT withholding agreements. Free amended tax return online   The WP and WT withholding agreements and the application procedures for the agreements are in Revenue Procedure 2003-64. Free amended tax return online Also see the following items. Free amended tax return online Revenue Procedure 2004-21. Free amended tax return online Revenue Procedure 2005-77. Free amended tax return online Employer identification number (EIN). Free amended tax return online   A completed Form SS-4 must be submitted with the application for being a WP or WT. Free amended tax return online The WP or WT will be assigned a WP-EIN or WT-EIN to be used only when acting in that capacity. Free amended tax return online Documentation. Free amended tax return online   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. Free amended tax return online 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. Free amended tax return online The Form W-8IMY must contain the WP-EIN or WT-EIN. Free amended tax return online Foreign Persons A payee is subject to NRA withholding only if it is a foreign person. Free amended tax return online 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. Free amended tax return online S. Free amended tax return online person. Free amended tax return online It also includes a foreign branch of a U. Free amended tax return online S. Free amended tax return online financial institution if the foreign branch is a qualified intermediary. Free amended tax return online In most cases, the U. Free amended tax return online S. Free amended tax return online branch of a foreign corporation or partnership is treated as a foreign person. Free amended tax return online Nonresident alien. Free amended tax return online   A nonresident alien is an individual who is not a U. Free amended tax return online S. Free amended tax return online citizen or a resident alien. Free amended tax return online A resident of a foreign country under the residence article of an income tax treaty is a nonresident alien individual for purposes of withholding. Free amended tax return online Married to U. Free amended tax return online S. Free amended tax return online citizen or resident alien. Free amended tax return online   Nonresident alien individuals married to U. Free amended tax return online S. Free amended tax return online citizens or resident aliens may choose to be treated as resident aliens for certain income tax purposes. Free amended tax return online However, these individuals are still subject to the NRA withholding rules that apply to nonresident aliens for all income except wages. Free amended tax return online Wages paid to these individuals are subject to graduated withholding. Free amended tax return online See Wages Paid to Employees—Graduated Withholding . Free amended tax return online Resident alien. Free amended tax return online   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. Free amended tax return online Green card test. Free amended tax return online 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. Free amended tax return online This is known as the green card test because these aliens hold immigrant visas (also known as green cards). Free amended tax return online Substantial presence test. Free amended tax return online An alien is considered a resident alien if the individual meets the substantial presence test for the calendar year. Free amended tax return online 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. Free amended tax return online   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. Free amended tax return online This exception is for a limited period of time. Free amended tax return online   For more information on resident and nonresident status, the tests for residence, and the exceptions to them, see Publication 519. Free amended tax return online Note. Free amended tax return online   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. Free amended tax return online For more information on making adjustments, see chapter 13 of Publication 15 (Circular E). Free amended tax return online Resident of a U. Free amended tax return online S. Free amended tax return online possession. Free amended tax return online   A bona fide resident of Puerto Rico, the U. Free amended tax return online S. Free amended tax return online Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands (CNMI), or American Samoa who is not a U. Free amended tax return online S. Free amended tax return online citizen or a U. Free amended tax return online S. Free amended tax return online national is treated as a nonresident alien for the withholding rules explained here. Free amended tax return online 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. Free amended tax return online   For more information, see Publication 570, Tax Guide for Individuals With Income From U. Free amended tax return online S. Free amended tax return online Possessions. Free amended tax return online Foreign corporations. Free amended tax return online   A foreign corporation is one that does not fit the definition of a domestic corporation. Free amended tax return online 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. Free amended tax return online Guam or Northern Mariana Islands corporations. Free amended tax return online   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). Free amended tax return online Note. Free amended tax return online   The provisions discussed below under U. Free amended tax return online S. Free amended tax return online 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. Free amended tax return online U. Free amended tax return online S. Free amended tax return online Virgin Islands and American Samoa corporations. Free amended tax return online   A corporation created or organized in, or under the laws of, the U. Free amended tax return online S. Free amended tax return online 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. Free amended tax return online S. Free amended tax return online 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. Free amended tax return online S. Free amended tax return online Virgin Islands, American Samoa, Guam, the CNMI, or the United States. Free amended tax return online Foreign private foundations. Free amended tax return online   A private foundation that was created or organized under the laws of a foreign country is a foreign private foundation. Free amended tax return online 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. Free amended tax return online Other foreign organizations, associations, and charitable institutions. Free amended tax return online   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. Free amended tax return online 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. Free amended tax return online   Payments to these organizations, however, must be reported on Form 1042-S, even though no tax is withheld. Free amended tax return online   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. Free amended tax return online U. Free amended tax return online S. Free amended tax return online branches of foreign persons. Free amended tax return online   In most cases, a payment to a U. Free amended tax return online S. Free amended tax return online branch of a foreign person is a payment made to the foreign person. Free amended tax return online However, you may treat payments to U. Free amended tax return online S. Free amended tax return online branches of foreign banks and foreign insurance companies (discussed earlier) that are subject to U. Free amended tax return online S. Free amended tax return online regulatory supervision as payments made to a U. Free amended tax return online S. Free amended tax return online person, if you and the U. Free amended tax return online S. Free amended tax return online branch have agreed to do so, and if their agreement is evidenced by a withholding certificate, Form W-8IMY. Free amended tax return online For this purpose, a financial institution organized under the laws of a U. Free amended tax return online S. Free amended tax return online possession is treated as a U. Free amended tax return online S. Free amended tax return online branch. Free amended tax return online 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. Free amended tax return online The payee is a U. Free amended tax return online S. Free amended tax return online person. Free amended tax return online The payee is a foreign person that is the beneficial owner of the income and is entitled to a reduced rate of withholding. Free amended tax return online In most cases, you must get the documentation before you make the payment. Free amended tax return online The documentation is not valid if you know, or have reason to know, that it is unreliable or incorrect. Free amended tax return online See Standards of Knowledge , later. Free amended tax return online If you cannot reliably associate a payment with valid documentation, you must use the presumption rules discussed later. Free amended tax return online 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. Free amended tax return online The specific types of documentation are discussed in this section. Free amended tax return online However, see Withholding on Specific Income , later, as well as the instructions to the particular forms. Free amended tax return online 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. Free amended tax return online Section 1446 withholding. Free amended tax return online   Under section 1446 of the Code, a partnership must withhold tax on its effectively connected income allocable to a foreign partner. Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online Joint owners. Free amended tax return online    If you make a payment to joint owners, you need to get documentation from each owner. Free amended tax return online Form W-9. Free amended tax return online   In most cases, you can treat the payee as a U. Free amended tax return online S. Free amended tax return online person if the payee gives you a Form W-9. Free amended tax return online The Form W-9 can be used only by a U. Free amended tax return online S. Free amended tax return online person and must contain the payee's taxpayer identification number (TIN). Free amended tax return online If there is more than one owner, you may treat the total amount as paid to a U. Free amended tax return online S. Free amended tax return online person if any one of the owners gives you a Form W-9. Free amended tax return online See U. Free amended tax return online S. Free amended tax return online Taxpayer Identification Numbers , later. Free amended tax return online U. Free amended tax return online S. Free amended tax return online persons are not subject to NRA withholding, but may be subject to Form 1099 reporting and backup withholding. Free amended tax return online Form W-8. Free amended tax return online   In most cases, a foreign payee of the income should give you a form in the Form W-8 series. Free amended tax return online Until further notice, you can rely upon Forms W-8 that contain a P. Free amended tax return online O. Free amended tax return online 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. Free amended tax return online S. Free amended tax return online person and that a street address is available. Free amended tax return online You may rely on Forms W-8 for which there is a U. Free amended tax return online S. Free amended tax return online mailing address provided you received the form prior to December 31, 2001. Free amended tax return online   If certain requirements are met, the foreign person can give you documentary evidence, rather than a Form W-8. Free amended tax return online You can rely on documentary evidence in lieu of a Form W-8 for a payment made in a U. Free amended tax return online S. Free amended tax return online possession. Free amended tax return online Other documentation. Free amended tax return online   Other documentation may be required to claim an exemption from, or a reduced rate of, withholding on pay for personal services. Free amended tax return online 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. Free amended tax return online These forms are discussed in Pay for Personal Services Performed under Withholding on Specific Income. Free amended tax return online 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. Free amended tax return online Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. Free amended tax return online   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. Free amended tax return online   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. Free amended tax return online 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. Free amended tax return online Claiming treaty benefits. Free amended tax return online   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. Free amended tax return online S. Free amended tax return online 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. Free amended tax return online   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. Free amended tax return online   An entity derives income for which it is claiming treaty benefits only if the entity is not treated as fiscally transparent for that income. Free amended tax return online See Fiscally transparent entity discussed earlier under Flow-Through Entities. Free amended tax return online   Limitations on benefits provisions generally prohibit third country residents from obtaining treaty benefits. Free amended tax return online 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. Free amended tax return online   The exemptions from, or reduced rates of, U. Free amended tax return online S. Free amended tax return online tax vary under each treaty. Free amended tax return online You must check the provisions of the tax treaty that apply. Free amended tax return online 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. Free amended tax return online   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. Free amended tax return online 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. Free amended tax return online Exceptions to TIN requirement. Free amended tax return online   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. Free amended tax return online Income from marketable securities (discussed next). Free amended tax return online Unexpected payments to an individual (discussed under U. Free amended tax return online S. Free amended tax return online Taxpayer Identification Numbers ). Free amended tax return online Marketable securities. Free amended tax return online   A Form W-8BEN provided to claim treaty benefits does not need a U. Free amended tax return online S. Free amended tax return online TIN if the foreign beneficial owner is claiming the benefits on income from marketable securities. Free amended tax return online For this purpose, income from a marketable security consists of the following items. Free amended tax return online Dividends and interest from stocks and debt obligations that are actively traded. Free amended tax return online Dividends from any redeemable security issued by an investment company registered under the Investment Company Act of 1940 (mutual fund). Free amended tax return online 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. Free amended tax return online Income related to loans of any of the above securities. Free amended tax return online Offshore accounts. Free amended tax return online   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. Free amended tax return online   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. Free amended tax return online 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. Free amended tax return online An offshore account is an account maintained at an office or branch of a U. Free amended tax return online S. Free amended tax return online or foreign bank or other financial institution at any location outside the United States. Free amended tax return online   You may rely on documentary evidence given to you by a nonqualified intermediary or a flow-through entity with its Form W-8IMY. Free amended tax return online This rule applies even though you make the payment to a nonqualified intermediary or flow-through entity in the United States. Free amended tax return online 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. Free amended tax return online Documentary evidence. Free amended tax return online   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. Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online   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. Free amended tax return online (See Effectively Connected Income , later. Free amended tax return online )   Effectively connected income for which a valid Form W-8ECI has been provided is generally not subject to NRA withholding. Free amended tax return online   If a partner submits this form to a partnership, the income claimed to be effectively connected with the conduct of a U. Free amended tax return online S. Free amended tax return online trade or business is subject to withholding under section 1446. Free amended tax return online 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. Free amended tax return online    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. Free amended tax return online Form W-8EXP, Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding. Free amended tax return online   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. Free amended tax return online S. Free amended tax return online 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. Free amended tax return online   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. Free amended tax return online   See Foreign Governments and Certain Other Foreign Organizations , later. Free amended tax return online 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. Free amended tax return online 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. Free amended tax return online The additional information required depends on the type of intermediary or flow-through entity and the extent of the withholding responsibilities it assumes. Free amended tax return online Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U. Free amended tax return online S. Free amended tax return online Branches for United States Tax Withholding. Free amended tax return online   This form is used by foreign intermediaries and foreign flow-through entities, as well as certain U. Free amended tax return online S. Free amended tax return online 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. Free amended tax return online S. Free amended tax return online branch of a foreign bank or insurance company and either is agreeing to be treated as a U. Free amended tax return online S. Free amended tax return online 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. Free amended tax return online For information on qualifying as an upper-tier foreign partnership, see Regulations section 1. Free amended tax return online 1446-5. Free amended tax return online Qualified Intermediaries In most cases, a QI is any foreign intermediary that has entered into a QI withholding agreement (discussed earlier) with the IRS. Free amended tax return online 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. Free amended tax return online The intermediary can claim that it is a QI until the IRS revokes its QI-EIN. Free amended tax return online 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. Free amended tax return online Responsibilities. Free amended tax return online   Payments made to a QI that does not assume NRA withholding responsibility are treated as paid to its account holders and customers. Free amended tax return online However, a QI is not required to provide you with documentation it obtains from its foreign account holders and customers. Free amended tax return online Instead, it provides you with a withholding statement that contains withholding rate pool information. Free amended tax return online 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. Free amended tax return online A qualified intermediary is required to provide you with information regarding U. Free amended tax return online S. Free amended tax return online persons subject to Form 1099 reporting and to provide you withholding rate pool information separately for each such U. Free amended tax return online S. Free amended tax return online person unless it has assumed Form 1099 reporting and backup withholding responsibility. Free amended tax return online For the alternative procedure for providing rate pool information for U. Free amended tax return online S. Free amended tax return online non-exempt persons, see the Form W-8IMY instructions. Free amended tax return online   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. Free amended tax return online   The extent to which you must have withholding rate pool information depends on the withholding and reporting obligations assumed by the QI. Free amended tax return online Primary responsibility not assumed. Free amended tax return online   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. Free amended tax return online Unless the alternative procedure applies, the qualified intermediary must provide you with a separate withholding rate pool for each U. Free amended tax return online S. Free amended tax return online person subject to Form 1099 reporting and/or backup withholding. Free amended tax return online 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. Free amended tax return online Primary NRA withholding responsibility assumed. Free amended tax return online   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. Free amended tax return online S. Free amended tax return online person, unless the alternative procedure applies, subject to Form 1099 reporting and/or backup withholding. Free amended tax return online 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. Free amended tax return online Primary NRA and Form 1099 responsibility assumed. Free amended tax return online   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. Free amended tax return online It is not necessary to associate the payment with withholding rate pools. Free amended tax return online Example. Free amended tax return online You make a payment of dividends to a QI. Free amended tax return online 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. Free amended tax return online S. Free amended tax return online individual who provides it with a Form W-9. Free amended tax return online Each customer is entitled to 20% of the dividend payment. Free amended tax return online The QI does not assume any primary withholding responsibility. Free amended tax return online 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. Free amended tax return online S. Free amended tax return online individual. Free amended tax return online 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. Free amended tax return online The part of the payment allocable to the U. Free amended tax return online S. Free amended tax return online individual (20%) is reportable on Form 1099-DIV. Free amended tax return online Smaller partnerships and trusts. Free amended tax return online   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. Free amended tax return online It is a foreign partnership or foreign simple or grantor trust. Free amended tax return online It is a direct account holder of the QI. Free amended tax return online It does not have any partner, beneficiary, or owner that is a U. Free amended tax return online S. Free amended tax return online person or a pass- through partner, beneficiary, or owner. Free amended tax return online   For information on these rules, see section 4A. Free amended tax return online 01 of the QI agreement. Free amended tax return online This is found in Appendix 3 of Revenue Procedure 2003-64. Free amended tax return online Also see Revenue Procedure 2004-21. Free amended tax return online Related partnerships and trusts. Free amended tax return online    A QI may apply special rules to a related partnership or trust only if the partnership or trust meets the following conditions. Free amended tax return online It is a foreign partnership or foreign simple or grantor trust. Free amended tax return online 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. Free amended tax return online For information on these rules, see section 4A. Free amended tax return online 02 of the QI agreement. Free amended tax return online This is found in Appendix 3 of Revenue Procedure 2003-64. Free amended tax return online Also see Revenue Procedure 2005-77. Free amended tax return online Nonqualified Intermediaries If you are making a payment to an NQI, foreign flow-through entity, or U. Free amended tax return online S. Free amended tax return online 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. Free amended tax return online S. Free amended tax return online branch), and You have sufficient information to report the payment on Form 1042-S or Form 1099, if reporting is required. Free amended tax return online The NQI, flow-through entity, or U. Free amended tax return online S. Free amended tax return online branch must give you certain information on a withholding statement that is associated with the Form W-8IMY. Free amended tax return online A withholding statement must be updated to keep the information accurate prior to each payment. Free amended tax return online Withholding statement. Free amended tax return online   In most cases, a withholding statement must contain the following information. Free amended tax return online The name, address, and TIN (if any, or if required) of each person for whom documentation is provided. Free amended tax return online The type of documentation (documentary evidence, Form W-8, or Form W-9) for every person for whom documentation has been provided. Free amended tax return online The status of the person for whom the documentation has been provided, such as whether the person is a U. Free amended tax return online S. Free amended tax return online exempt recipient (U. Free amended tax return online S. Free amended tax return online person exempt from Form 1099 reporting), U. Free amended tax return online S. Free amended tax return online non-exempt recipient (U. Free amended tax return online S. Free amended tax return online person subject to Form 1099 reporting), or a foreign person. Free amended tax return online 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. Free amended tax return online S. Free amended tax return online branch. Free amended tax return online The type of recipient the person is, based on the recipient codes used on Form 1042-S. Free amended tax return online Information allocating each payment, by income type, to each payee (including U. Free amended tax return online S. Free amended tax return online exempt and U. Free amended tax return online S. Free amended tax return online non-exempt recipients) for whom documentation has been provided. Free amended tax return online The rate of withholding that applies to each foreign person to whom a payment is allocated. Free amended tax return online A foreign payee's country of residence. Free amended tax return online If a reduced rate of withholding is claimed, the basis for a reduced rate of withholding (for example, portfolio interest, treaty benefit, etc. Free amended tax return online ). Free amended tax return online 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. Free amended tax return online The name, address, and TIN (if any) of any other NQI, flow-through entity, or U. Free amended tax return online S. Free amended tax return online branch from which the payee will directly receive a payment. Free amended tax return online Any other information a withholding agent requests to fulfill its reporting and withholding obligations. Free amended tax return online Alternative procedure. Free amended tax return online   Under this alternative procedure the NQI can give you the information that allocates each payment to each foreign and U. Free amended tax return online S. Free amended tax return online exempt recipient by January 31 following the calendar year of payment, rather than prior to the payment being made as otherwise required. Free amended tax return online 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. Free amended tax return online You must receive the withholding statement with all the required information (other than item 5) prior to making the payment. Free amended tax return online    This alternative procedure cannot be used for payments to U. Free amended tax return online S. Free amended tax return online non-exempt recipients. Free amended tax return online Therefore, an NQI must always provide you with allocation information for all U. Free amended tax return online S. Free amended tax return online non-exempt recipients prior to a payment being made. Free amended tax return online Pooled withholding information. Free amended tax return online   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. Free amended tax return online 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. Free amended tax return online 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). Free amended tax return online 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. Free amended tax return online Failure to provide allocation information. Free amended tax return online   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. Free amended tax return online You must treat the payees as undocumented and apply the presumption rules, discussed later in Presumption Rules . Free amended tax return online An NQI is deemed to have f