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Free State E Filing

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Free State E Filing

Free state e filing 3. Free state e filing   Savings Incentive Match Plans for Employees (SIMPLE) Table of Contents Introduction What Is a SIMPLE Plan?Eligible Employees How Are Contributions Made? How Much Can Be Contributed on Your Behalf?Matching contributions less than 3%. Free state e filing Traditional IRA mistakenly moved to SIMPLE IRA. Free state e filing When Can You Withdraw or Use Assets?Are Distributions Taxable? Introduction This chapter is for employees who need information about savings incentive match plans for employees (SIMPLE plans). Free state e filing It explains what a SIMPLE plan is, contributions to a SIMPLE plan, and distributions from a SIMPLE plan. Free state e filing Under a SIMPLE plan, SIMPLE retirement accounts for participating employees can be set up either as: Part of a 401(k) plan, or A plan using IRAs (SIMPLE IRA). Free state e filing This chapter only discusses the SIMPLE plan rules that relate to SIMPLE IRAs. Free state e filing See chapter 3 of Publication 560 for information on any special rules for SIMPLE plans that do not use IRAs. Free state e filing If your employer maintains a SIMPLE plan, you must be notified, in writing, that you can choose the financial institution that will serve as trustee for your SIMPLE IRA and that you can roll over or transfer your SIMPLE IRA to another financial institution. Free state e filing See Rollovers and Transfers Exception, later under When Can You Withdraw or Use Assets. Free state e filing What Is a SIMPLE Plan? A SIMPLE plan is a tax-favored retirement plan that certain small employers (including self-employed individuals) can set up for the benefit of their employees. Free state e filing See chapter 3 of Publication 560 for information on the requirements employers must satisfy to set up a SIMPLE plan. Free state e filing A SIMPLE plan is a written agreement (salary reduction agreement) between you and your employer that allows you, if you are an eligible employee (including a self-employed individual), to choose to: Reduce your compensation (salary) by a certain percentage each pay period, and Have your employer contribute the salary reductions to a SIMPLE IRA on your behalf. Free state e filing These contributions are called salary reduction contributions. Free state e filing All contributions under a SIMPLE IRA plan must be made to SIMPLE IRAs, not to any other type of IRA. Free state e filing The SIMPLE IRA can be an individual retirement account or an individual retirement annuity, described in chapter 1. Free state e filing Contributions are made on behalf of eligible employees. Free state e filing (See Eligible Employees below. Free state e filing ) Contributions are also subject to various limits. Free state e filing (See How Much Can Be Contributed on Your Behalf , later. Free state e filing ) In addition to salary reduction contributions, your employer must make either matching contributions or nonelective contributions. Free state e filing See How Are Contributions Made , later. Free state e filing You may be able to claim a credit for contributions to your SIMPLE plan. Free state e filing For more information, see chapter 4. Free state e filing Eligible Employees You must be allowed to participate in your employer's SIMPLE plan if you: Received at least $5,000 in compensation from your employer during any 2 years prior to the current year, and Are reasonably expected to receive at least $5,000 in compensation during the calendar year for which contributions are made. Free state e filing Self-employed individual. Free state e filing   For SIMPLE plan purposes, the term employee includes a self-employed individual who received earned income. Free state e filing Excludable employees. Free state e filing   Your employer can exclude the following employees from participating in the SIMPLE plan. Free state e filing Employees whose retirement benefits are covered by a collective bargaining agreement (union contract). Free state e filing Employees who are nonresident aliens and received no earned income from sources within the United States. Free state e filing Employees who would not have been eligible employees if an acquisition, disposition, or similar transaction had not occurred during the year. Free state e filing Compensation. Free state e filing   For purposes of the SIMPLE plan rules, your compensation for a year generally includes the following amounts. Free state e filing Wages, tips, and other pay from your employer that is subject to income tax withholding. Free state e filing Deferred amounts elected under any 401(k) plans, 403(b) plans, government (section 457) plans, SEP plans, and SIMPLE plans. Free state e filing Self-employed individual compensation. Free state e filing   For purposes of the SIMPLE plan rules, if you are self-employed, your compensation for a year is your net earnings from self-employment (Schedule SE (Form 1040), Section A, line 4, or Section B, line 6) before subtracting any contributions made to a SIMPLE IRA on your behalf. Free state e filing   For these purposes, net earnings from self-employment include services performed while claiming exemption from self-employment tax as a member of a group conscientiously opposed to social security benefits. Free state e filing How Are Contributions Made? Contributions under a salary reduction agreement are called salary reduction contributions. Free state e filing They are made on your behalf by your employer. Free state e filing Your employer must also make either matching contributions or nonelective contributions. Free state e filing Salary reduction contributions. Free state e filing   During the 60-day period before the beginning of any year, and during the 60-day period before you are eligible, you can choose salary reduction contributions expressed either as a percentage of compensation, or as a specific dollar amount (if your employer offers this choice). Free state e filing You can choose to cancel the election at any time during the year. Free state e filing   Salary reduction contributions are also referred to as “elective deferrals. Free state e filing ”   Your employer cannot place restrictions on the contributions amount (such as by limiting the contributions percentage), except to comply with the salary reduction contributions limit, discussed under How Much Can Be Contributed on Your Behalf, later. Free state e filing Matching contributions. Free state e filing   Unless your employer chooses to make nonelective contributions, your employer must make contributions equal to the salary reduction contributions you choose (elect), but only up to certain limits. Free state e filing See How Much Can Be Contributed on Your Behalf below. Free state e filing These contributions are in addition to the salary reduction contributions and must be made to the SIMPLE IRAs of all eligible employees (defined earlier) who chose salary reductions. Free state e filing These contributions are referred to as matching contributions. Free state e filing   Matching contributions on behalf of a self-employed individual are not treated as salary reduction contributions. Free state e filing Nonelective contributions. Free state e filing   Instead of making matching contributions, your employer may be able to choose to make nonelective contributions on behalf of all eligible employees. Free state e filing These nonelective contributions must be made on behalf of each eligible employee who has at least $5,000 of compensation from your employer, whether or not the employee chose salary reductions. Free state e filing   One of the requirements your employer must satisfy is notifying the employees that the election was made. Free state e filing For other requirements that your employer must satisfy, see chapter 3 of Publication 560. Free state e filing How Much Can Be Contributed on Your Behalf? The limits on contributions to a SIMPLE IRA vary with the type of contribution that is made. Free state e filing Salary reduction contributions limit. Free state e filing   Salary reduction contributions (employee-chosen contributions or elective deferrals) that your employer can make on your behalf under a SIMPLE plan are limited to $12,000 for 2013. Free state e filing The limitation remains at $12,000 for 2014. Free state e filing If you are a participant in any other employer plans during 2013 and you have elective salary reductions or deferred compensation under those plans, the salary reduction contributions under the SIMPLE plan also are included in the annual limit of $17,500 for 2013 on exclusions of salary reductions and other elective deferrals. Free state e filing You, not your employer, are responsible for monitoring compliance with these limits. Free state e filing Additional elective deferrals can be contributed to your SIMPLE plan if: You reached age 50 by the end of 2013, and No other elective deferrals can be made for you to the plan for the year because of limits or restrictions, such as the regular annual limit. Free state e filing The most that can be contributed in additional elective deferrals to your SIMPLE plan is the lesser of the following two amounts. Free state e filing $2,500 for 2013, or Your compensation for the year reduced by your other elective deferrals for the year. Free state e filing The additional deferrals are not subject to any other contribution limit and are not taken into account in applying other contribution limits. Free state e filing The additional deferrals are not subject to the nondiscrimination rules as long as all eligible participants are allowed to make them. Free state e filing Matching employer contributions limit. Free state e filing   Generally, your employer must make matching contributions to your SIMPLE IRA in an amount equal to your salary reduction contributions. Free state e filing These matching contributions cannot be more than 3% of your compensation for the calendar year. Free state e filing See Matching contributions less than 3% below. Free state e filing Example 1. Free state e filing In 2013, Joshua was a participant in his employer's SIMPLE plan. Free state e filing His compensation, before SIMPLE plan contributions, was $41,600 ($800 per week). Free state e filing Instead of taking it all in cash, Joshua elected to have 12. Free state e filing 5% of his weekly pay ($100) contributed to his SIMPLE IRA. Free state e filing For the full year, Joshua's salary reduction contributions were $5,200, which is less than the $12,000 limit on these contributions. Free state e filing Under the plan, Joshua's employer was required to make matching contributions to Joshua's SIMPLE IRA. Free state e filing Because his employer's matching contributions must equal Joshua's salary reductions, but cannot be more than 3% of his compensation (before salary reductions) for the year, his employer's matching contribution was limited to $1,248 (3% of $41,600). Free state e filing Example 2. Free state e filing Assume the same facts as in Example 1 , except that Joshua's compensation for the year was $408,163 and he chose to have 2. Free state e filing 94% of his weekly pay contributed to his SIMPLE IRA. Free state e filing In this example, Joshua's salary reduction contributions for the year (2. Free state e filing 94% × $408,163) were equal to the 2013 limit for salary reduction contributions ($12,000). Free state e filing Because 3% of Joshua's compensation ($12,245) is more than the amount his employer was required to match ($12,000), his employer's matching contributions were limited to $12,000. Free state e filing In this example, total contributions made on Joshua's behalf for the year were $24,000 ($12,000 (Joshua's contributions) + $12,000 (matching contributions)), the maximum contributions permitted under a SIMPLE IRA for 2013. Free state e filing Matching contributions less than 3%. Free state e filing   Your employer can reduce the 3% limit on matching contributions for a calendar year, but only if: The limit is not reduced below 1%, The limit is not reduced for more than 2 years out of the 5-year period that ends with (and includes) the year for which the election is effective, and Employees are notified of the reduced limit within a reasonable period of time before the 60-day election period during which they can enter into salary reduction agreements. Free state e filing   For purposes of applying the rule in item (2) in determining whether the limit was reduced below 3% for the year, any year before the first year in which your employer (or a former employer) maintains a SIMPLE IRA plan will be treated as a year for which the limit was 3%. Free state e filing If your employer chooses to make nonelective contributions for a year, that year also will be treated as a year for which the limit was 3%. Free state e filing Nonelective employer contributions limit. Free state e filing   If your employer chooses to make nonelective contributions, instead of matching contributions, to each eligible employee's SIMPLE IRA, contributions must be 2% of your compensation for the entire year. Free state e filing For 2013, only $255,000 of your compensation can be taken into account to figure the contribution limit. Free state e filing   Your employer can substitute the 2% nonelective contribution for the matching contribution for a year if both of the following requirements are met. Free state e filing Eligible employees are notified that a 2% nonelective contribution will be made instead of a matching contribution. Free state e filing This notice is provided within a reasonable period during which employees can enter into salary reduction agreements. Free state e filing Example 3. Free state e filing Assume the same facts as in Example 2 , except that Joshua's employer chose to make nonelective contributions instead of matching contributions. Free state e filing Because his employer's nonelective contributions are limited to 2% of up to $255,000 of Joshua's compensation, his employer's contribution to Joshua's SIMPLE IRA was limited to $5,100. Free state e filing In this example, total contributions made on Joshua's behalf for the year were $17,100 (Joshua's salary reductions of $12,000 plus his employer's contribution of $5,100). Free state e filing Traditional IRA mistakenly moved to SIMPLE IRA. Free state e filing   If you mistakenly roll over or transfer an amount from a traditional IRA to a SIMPLE IRA, you can later recharacterize the amount as a contribution to another traditional IRA. Free state e filing For more information, see Recharacterizations in chapter 1. Free state e filing Recharacterizing employer contributions. Free state e filing   You cannot recharacterize employer contributions (including elective deferrals) under a SEP or SIMPLE plan as contributions to another IRA. Free state e filing SEPs are discussed in chapter 2 of Publication 560. Free state e filing SIMPLE plans are discussed in this chapter. Free state e filing Converting from a SIMPLE IRA. Free state e filing   Generally, you can convert an amount in your SIMPLE IRA to a Roth IRA under the same rules explained in chapter 1 under Converting From Any Traditional IRA Into a Roth IRA . Free state e filing    However, you cannot convert any amount distributed from the SIMPLE IRA during the 2-year period beginning on the date you first participated in any SIMPLE IRA plan maintained by your employer. Free state e filing When Can You Withdraw or Use Assets? Generally, the same distribution (withdrawal) rules that apply to traditional IRAs apply to SIMPLE IRAs. Free state e filing These rules are discussed in chapter 1. Free state e filing Your employer cannot restrict you from taking distributions from a SIMPLE IRA. Free state e filing Are Distributions Taxable? Generally, distributions from a SIMPLE IRA are fully taxable as ordinary income. Free state e filing If the distribution is an early distribution (discussed in chapter 1), it may be subject to the additional tax on early distributions. Free state e filing See Additional Tax on Early Distributions, later. Free state e filing Rollovers and Transfers Exception Generally, rollovers and trustee-to-trustee transfers are not taxable distributions. Free state e filing Two-year rule. Free state e filing   To qualify as a tax-free rollover (or a tax-free trustee-to-trustee transfer), a rollover distribution (or a transfer) made from a SIMPLE IRA during the 2-year period beginning on the date on which you first participated in your employer's SIMPLE plan must be contributed (or transferred) to another SIMPLE IRA. Free state e filing The 2-year period begins on the first day on which contributions made by your employer are deposited in your SIMPLE IRA. Free state e filing   After the 2-year period, amounts in a SIMPLE IRA can be rolled over or transferred tax free to an IRA other than a SIMPLE IRA, or to a qualified plan, a tax-sheltered annuity plan (section 403(b) plan), or deferred compensation plan of a state or local government (section 457 plan). Free state e filing Additional Tax on Early Distributions The additional tax on early distributions (discussed in chapter 1) applies to SIMPLE IRAs. Free state e filing If a distribution is an early distribution and occurs during the 2-year period following the date on which you first participated in your employer's SIMPLE plan, the additional tax on early distributions is increased from 10% to 25%. Free state e filing If a rollover distribution (or transfer) from a SIMPLE IRA does not satisfy the 2-year rule, and is otherwise an early distribution, the additional tax imposed because of the early distribution is increased from 10% to 25% of the amount distributed. 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Resources for People with Disabilities

Read below to locate information and resources for disabled consumers. You can also visit Disability.gov to find resources in your community.


Organizations that Provide Services to Consumers with Disabilities

The National Council on Disability (NCD) is an independent federal agency that makes recommendations to the President and Congress to improve the quality of life for Americans with disabilities and their families. The NCD works to empower individuals with disabilities and to promote equal opportunity

The National Disability Rights Network (NDRN) provides legally based advocacy services for people with disabilities in the U.S.

The U.S. Department of Education's Office of Special Education and Rehabilitative Services (OSERS) provides training and information to parents of disabled children and to people who work with them.

The U.S. Department of Housing and Urban Development's (HUD) Office of Fair Housing and Equal Opportunity offers resources and answers questions about the housing rights of people with disabilities, and the responsibilities of housing providers and building and design professionals according to the federal law.

National Library Service for the Blind and Physically Handicapped (NLS) administers a free loan service of recorded and Braille books and magazines, music scores in Braille and large print, plus specially designed playback equipment. Service is also extended to eligible American citizens residing abroad. While NLS administers the program, direct service is provided through a national network of cooperating libraries.

Services and Resources for Consumers with Disabilities

Relay Services. Telecommunications relay services link telephone conversations between individuals who use standard voice telephones and those who use text telephones (TTYs). Calls can be made from either type of telephone to the other type through the relay service.

Local Relay Services. States provide relay services for local and long distance calls. Please consult your local telephone directory for information on the use, fees (if any), services, and dialing instructions for that area.

Federal Relay Service. The FRS, a program of the U.S. General Services Administration (GSA), provides access to TTY users who wish to conduct official business nationwide with and within the federal government. The toll-free number is 1-800-377-8642. For more information on relay communications or to obtain a brochure on using the FRS, please call toll-free 1-800-877-0996.

Other Services. Consumers who are deaf or hard of hearing, or who have a speech impairment, and use a TTY may receive operator and directory assistance for calls by calling toll-free 1-800-855-1155. Check the introductory pages of your local telephone directory for additional TTY services.

The Free State E Filing

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