US tax Form W-8BEN for non-US taxpayers (2024)

FAQs

What is a w8ben for non US residents? ›

What is the W-8BEN and what is its purpose? The W-8BEN is an Internal Revenue Service (IRS) mandated form to collect correct Nonresident Alien (NRA) taxpayer information for individuals for reporting purposes and to document their status for tax reporting purposes.

Who Must Provide Form W-8BEN. You must give Form W-8BEN to the withholding agent or payer if you are a nonresident alien who is the beneficial owner of an amount subject to withholding, or if you are an account holder of an FFI documenting yourself as a nonresident alien.

By completing a Form W-8BEN, you confirm to us that you are not a U.S. Taxpayer and you will avoid having taxes withheld from your interest payments. Form W-8BEN is mandatory for all foreign customers who hold an account with BB Americas Bank.

You must file Form 1040-NR, U.S. Nonresident Alien Income Tax Return only if you have income that is subject to tax, such as wages, tips, scholarship and fellowship grants, dividends, etc. Refer to Foreign Students and Scholars for more information.

An alien is any individual who is not a U.S. citizen or U.S. national. A nonresident alien is an alien who has not passed the green card test or the substantial presence test.

Businesses must withhold 30 percent of the money they pay nonresident alien independent contractors for their personal services unless the nonresident alien provides an IRS-approved withholding agreement or Form W-8 for reduced withholding.

Through FATCA, the IRS receives account numbers, balances, names, addresses, and identification numbers of account holders. Americans with foreign accounts must also submit Form 8938 to the IRS in addition to the largely redundant FBAR form.

W-8BEN is an IRS form used by individual nonresident aliens (NRA) to report information to withholding agents, payers, or FFIs if they are the beneficial owner of an amount from U.S. sources subject to income tax withholding or the NRA account holder at a foreign financial institution (FFI).

The W-8BEN form lets you benefit from the US Internal Revenue Service (IRS) treaty rate with the UK. This lowers the withholding tax for qualifying dividends and interest from US shares from 30% to 15%.

One of the main catalysts for the IRS to learn about foreign income which was not reported is through FATCA, which is the Foreign Account Tax Compliance Act.

How much foreign income is tax free in the USA? ›

The maximum foreign earned income exclusion amount is adjusted annually for inflation. For tax year 2023, the maximum foreign earned income exclusion is the lesser of the foreign income earned or $120,000 per qualifying person. For tax year 2024, the maximum exclusion is $126,500 per person.

If you have income from the USA, you may have to file a USA income tax return even if you are only visiting this country. This publication summarizes for you the requirements of USA income tax law. See If You Need Help at the end of this publication for how to get more information.

If you are living and working in the U.S. as a nonresident alien, you may be required to file a federal tax return. The Internal Revenue Service (IRS) considers you a nonresident alien if you are not a lawful permanent resident (Green Card holder) or do not pass their substantial presence test.

Nonresident aliens use Form 1040NR or 1040NR-EZ to report only income sourced in the United States, or effectively connected with a United States trade or business.

Most types of U.S. source income received by a foreign person are subject to U.S. tax of 30%. A reduced rate, including exemption, may apply if an Internal Revenue Code Section provides for a lower rate, or there is a tax treaty between the foreign person's country of residence and the United States.