Tax: Non-US Persons and Entities: Refunds of Tax Withheld

In general, amounts withheld for U.S. taxes are non-refundable. However, under certain circumstances, such as an incorrect rate being applied to withhold tax, a refund can be obtained. If you are an individual, file either Form 1040NR, "U.S. Nonresident Alien Income Tax Return" or 1040NR-EZ "U.S. Income Tax Return for Certain Non-Resident Aliens with No Dependents" to obtain a refund. There are similar U. S. forms for trusts and corporations. IRS Publication 515 "Withholding of Tax on Non-Resident Aliens and Foreign Entities" and IRS Publication 519, "U.S. Tax Guide for Aliens", available free at www.IRS.gov/formspubs provide more information on this subject.

Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

Tax: Non-US Persons and Entities: Amended Form 1042-S

We may need to amend and re-issue 1042-S forms as additional information becomes available to us.  For example, an amended Form 1042-S will be issued to reflect the late announcement by an investment fund that fund units have been reclassified.   If we do revise your Form 1042-S, you will receive email notification that there has been a change. A revised form will be posted in Account Management and resubmitted to the IRS. Consult your tax advisor for further guidance.

Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

Tax: Non-US Persons and Entities: My Form 1042-S is Incorrect

If your name, address or US Taxpayer Identification Number or other information on a Form 1042-S inaccurate, send a correction request to Customer Service by logging in to Account Management. 

In old Account Management:  Click the Message Center icon in the Customer Service area at the top left of the page.  In the New Ticket selection box, use the drop down arrow to select Tax Correction Form and click Create.

In new Account Management:  Click Support and the Message Center window appears.  In the New Ticket selection box, use the drop down arrow to select Tax Correction Form and click Create.

Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

Tax: Non-US Persons and Entities: What to do if your Form 1042-S is not posted in Account Management

If you are missing a 1042-S, verify that you received interest, dividends or substitute payments in lieu from US sources in the previous year.

Once you have reviewed your account activity for the previous tax year and determined that you should have received a Form 1042-S for an account, please contact our Customer Service department with specific transaction details, including the name of the security, number of shares/contracts and trade dates.  We will research the issue and advise you once we have concluded our investigation.

Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

Tax: Non-US Persons and Entities: Availability of Form 1042-S

Forms 1042-S are generally made available by March 15 for the previous calendar year.

Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

Tax: Non-US Persons and Entities: Form 1042-S

Form 1042-S reports US source income earned by non-US persons subject to US withholding tax, including interest, dividends, substitute payments in lieu and fees earned (paid to and for account managers) on your account for the year.  You may receive multiple 1042-S forms reporting different types of income.  This information is also reported to the IRS. Each type of income is reported on a separate form using a code in Box 1. Common codes are:

 

Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

Tax: Non-US Persons and Entities: How to Access Tax Forms

Your tax forms, including Form 1042-S, Annual Activity Statement and Dividend Report, are available in electronic format.  To access forms, log into Account Management and click Reports > Tax Forms. If you have the old Account Management format, log in and select Tax Forms from the Report Management menu. Please review the information on your forms.

Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

Tax: Non-US Persons and Entities: Where IB Sends Tax Withheld

Interactive Brokers remits the tax withheld to the US Treasury Department.

Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

Tax: Non-US Persons and Entities: US Withholding Tax on Dividends and Substitute Payments in Lieu

US tax law requires the withholding of tax for non-US persons (non-resident aliens) at a rate of 30% on payments of US source stock dividends, short-term capital gain distributions and substitute payments in lieu.  You may be eligible for a reduced rate of withholding if there is a treaty in effect between your country of tax residence and the US, and IB is able to associate the payment with a valid Form W-8.  Refer to IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for more information.

Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

Non-US Persons and Entities: What is meant by US source income?

In general, US source income refers to dividend and interest income earned on securities issued by US companies or US registered mutual funds as well as interest earned on US Treasury obligations and US Government agency securities. Non-US persons who receive US source income are subject to US tax withholding.  IB is required to report US source income on Form 1042-S (See the next FAQ).  Refer to IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities and Publication 519, US Tax Guide for Aliens for more information.

Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

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