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Federal Ez Form

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Federal Ez Form

Federal ez form Publication 557 - Additional Material Table of Contents Appendix. Federal ez form Sample Articles of Organization, continued Organization Reference Chart Section of 1986 Code Description of organization General nature of activities Application  Form Annual return required to be  filed Contributions  allowable 501(c)(1) Corporations Organized under Act of Congress (including Federal Credit Unions) Instrumentalities of the  United States No Form None Yes, if made for exclusively public purposes 501(c)(2) Title Holding Corporation For Exempt Organization Holding title to property of an  exempt organization 1024 9901 or 990-EZ8 No2 501(c)(3) Religious, Educational, Charitable, Scientific, Literary, Testing for Public Safety, to Foster National or International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals Organizations Activities of nature implied by description of class of organization 1023 9901 or 990-EZ8, or 990-PF Yes, generally 501(c)(4) Civic Leagues, Social Welfare Organizations, and Local Associations of Employees Promotion of community welfare; charitable, educational, or recreational 1024 9901 or 990-EZ8 No, generally 2, 3 501(c)(5) Labor, Agricultural, and Horticultural Organizations Educational or instructive, the  purpose being to improve conditions of work, and to improve products of efficiency 1024 9901 or 990-EZ8 No2 501(c)(6) Business Leagues, Chambers of Commerce, Real Estate Boards, etc. Federal ez form Improvement of business  conditions of one or more lines of business 1024 9901 or 990-EZ8 No2 501(c)(7) Social and Recreational Clubs Pleasure, recreation, social activities 1024 9901 or 990-EZ8 No2 501(c)(8) Fraternal Beneficiary Societies  and Associations Lodge providing for payment of life, sickness, accident or other benefits  to members 1024 9901 or 990-EZ8 Yes, if for certain Sec. Federal ez form 501(c)(3) purposes 501(c)(9) Voluntary Employees Beneficiary Associations Providing for payment of life, sickness, accident, or other benefits to members 1024 9901 or 990-EZ8 No2 501(c)(10) Domestic Fraternal Societies  and Associations Lodge devoting its net earnings to charitable, fraternal, and other  specified purposes. Federal ez form No life, sickness, or accident benefits to members 1024 9901 or 990-EZ8 Yes, if for certain Sec. Federal ez form 501(c)(3) purposes 501(c)(11) Teachers' Retirement Fund Associations Teachers' association for payment of retirement benefits Letter6 9901 or 990-EZ8 No2 501(c)(12) Benevolent Life Insurance Associations, Mutual Ditch or  Irrigation Companies, Mutual or Cooperative Telephone Companies, etc. Federal ez form Activities of a mutually beneficial  nature similar to those implied by the description of class of organization 1024 9901 or 990-EZ8 No2 501(c)(13) Cemetery Companies Burials and incidental activities 1024 9901 or 990-EZ8 Yes, generally 501(c)(14) State-Chartered Credit Unions,  Mutual Reserve Funds Loans to members Letter6 9901 or 990-EZ8 No2 501(c)(15) Mutual Insurance Companies or Associations Providing insurance to members substantially at cost 1024 9901 or 990-EZ8 No2 501(c)(16) Cooperative Organizations to  Finance Crop Operations Financing crop operations in  conjunction with activities of a marketing  or purchasing association Form 1120-C6 9901 or 990-EZ8 No2 501(c)(17) Supplemental Unemployment  Benefit Trusts Provides for payment of  supplemental unemployment compensation benefits 1024 9901 or 990-EZ8 No2 501(c)(18) Employee Funded Pension Trust (created before June 25, 1959) Payment of benefits under a  pension plan funded by employees Letter6 9901 or 990-EZ8 No2 501(c)(19) Post or Organization of Past or  Present Members of the Armed Forces Activities implied by nature of organization 1024 9901 or 990-EZ8 No, generally7 501(c)(21) Black Lung Benefit Trusts Funded by coal mine operators to satisfy their liability for disability or  death due to black lung diseases Letter6 990-BL No4 501(c)(22) Withdrawal Liability Payment Fund To provide funds to meet the  liability of employers withdrawing from  a multi-employer pension fund Letter6 9901 or 990-EZ8 No5 501(c)(23) Veterans' Organization (created before 1880) To provide insurance and other  benefits to veterans Letter6 9901 or 990-EZ8 No, generally7 501(c)(25) Title Holding Corporations or Trusts with Multiple Parent Corporations Holding title and paying over  income from property to 35 or fewer parents or beneficiaries 1024 9901 or 990-EZ8 No 501(c)(26) State-Sponsored Organization Providing Health Coverage for High-Risk Individuals Provides health care coverage to high-risk individuals Letter6 9901 or 990-EZ8 No 501(c)(27) State-Sponsored Workers' Compensation Reinsurance Organization Reimburses members for losses  under workers' compensation acts Letter6 9901 or 990-EZ8 No 501(c)(28) National Railroad Retirement Investment Trust Manages and invests the assets of the Railroad Retirement Account No Form 99011 No11 501(c)(29) CO-OP health insurance issuers A qualified health insurance issuer which has received a loan or grant under the CO-OP program Letter and Form 871814 9901 No13 501(d) Religious and Apostolic Associations Regular business activities;  Communal religious community No Form 10659 No2 501(e) Cooperative Hospital Service Organizations Performs cooperative services for hospitals 1023 9901 or 990-EZ8 Yes 501(f) Cooperative Service Organizations  of Operating Educational Organizations Performs collective investment  services for educational organizations 1023 9901 or 990-EZ8 Yes 501(k) Child Care Organizations Provides care for children 1023 9901 or 990-EZ8 Yes 501(n) Charitable Risk Pools Pools certain insurance risks of sec. Federal ez form 501(c)(3) organizations 1023 9901 or 990-EZ8 Yes 501(q) Credit Counseling Organization Credit counseling services 1023 102312 No 521(a) Farmers' Cooperative Associations Cooperative marketing and  purchasing for agricultural procedures 1028 1120-C No 527 Political organizations A party, committee, fund,  association, etc. Federal ez form , that directly or indirectly accepts contributions or makes expenditures for political campaigns 8871 1120-POL10 9901 or 990-EZ8 No 1For exceptions to the filing requirement, see chapter 2 and the form instructions. Federal ez form Note: For annual tax periods beginning after 2006, most tax-exempt organizations, other than churches, are required to file an annual Form 990, 990-EZ, or 990-PF with the IRS or to submit an annual electronic notice, Form 990-N (e-Postcard), to the IRS. Federal ez form Tax-exempt organizations failing to file an annual return or submit an annual notice as required for 3 consecutive years will automatically lose their tax-exempt status. Federal ez form    2An organization exempt under a subsection of section 501 other than 501(c)(3) can establish a charitable fund, contributions to which are deductible. Federal ez form Such a fund must itself meet the requirements of section 501(c)(3) and the related notice requirements of section 508(a). Federal ez form    3Contributions to volunteer fire companies and similar organizations are deductible, but only if made for exclusively public purposes. Federal ez form    4Deductible as a business expense to the extent allowed by section 192. Federal ez form    5Deductible as a business expense to the extent allowed by section 194A. Federal ez form 6Application is by letter to the address shown on Form 8718. Federal ez form A copy of the organizing document should be attached and the letter should be signed by an officer. Federal ez form    7Contributions to these organizations are deductible only if 90% or more of the organization's members are war veterans. Federal ez form    8For limits on the use of Form 990-EZ, see chapter 2 and the general instructions for Form 990-EZ (or Form 990). Federal ez form    9Although the organization files a partnership return, all distributions are deemed dividends. Federal ez form The members are not entitled to pass through treatment of the organization's income or expenses. Federal ez form    10Form 1120-POL is required only if the organization has taxable income as defined in section 527(c). Federal ez form    11Only required to annually file so much of the Form 990 that relates to the names and addresses of the officers, directors, trustees, and key employees, and their titles, compensation, and hours devoted to their positions (Part VII of Form 990), and to complete Item I in the Heading of Form 990 to confirm its tax-exempt status under section 501(c)(28). Federal ez form    12See section 501(q) if the organization provides credit counseling services and seeks recognition of exemption under section 501(c)(4). Federal ez form Use Form 1024 if applying for recognition under section 501(c)(4). Federal ez form    13See section 501(c)(29) for details. Federal ez form    14See Revenue Procedure 2012-11, sec. Federal ez form 4. Federal ez form 01, 2012-7 I. Federal ez form R. Federal ez form B. Federal ez form 368, for details. Federal ez form Appendix. Federal ez form Sample Articles of Organization The following are examples of Articles of Incorporation (Draft A) and a declaration of trust (Draft B) that contain the required information as to purposes and powers of an organization and disposition of its assets upon dissolution. Federal ez form You should bear in mind that requirements for these instruments may vary under applicable state law. Federal ez form See Private Foundations and Public Charities , earlier for the special provisions required in a private foundation's governing instrument in order for it to qualify for exemption. Federal ez form DRAFT A  Articles of Incorporation of the undersigned, a majority of whom are citizens of the United States, desiring to form a Non-Profit Corporation under the Non-Profit Corporation Law of , do hereby certify: First: The name of the Corporation shall be . Federal ez form Second: The place in this state where the principal office of the Corporation is to be located is the City of , County. Federal ez form Third: Said corporation is organized exclusively for charitable, religious, educational, and scientific purposes, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. Federal ez form Fourth: The names and addresses of the persons who are the initial trustees of the corporation are as follows: Name , Address Fifth: No part of the net earnings of the corporation shall inure to the benefit of, or be distributable to its members, trustees, officers, or other private persons, except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes set forth in Article Third hereof. Federal ez form No substantial part of the activities of the corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and the corporation shall not participate in, or intervene in (including the publishing or distribution of statements) any political campaign on behalf of or in opposition to any candidate for public office. Federal ez form Notwithstanding any other provision of these articles, the corporation shall not carry on any other activities not permitted to be carried on (a) by a corporation exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or (b) by a corporation, contributions to which are deductible under section 170(c)(2) of the Internal Revenue Code, or the corresponding section of any future federal tax code. Federal ez form   If reference to federal law in articles of incorporation imposes a limitation that is invalid in your state, you may wish to substitute the following for the last sentence of the preceding paragraph: “Notwithstanding any other provision of these articles, this corporation shall not, except to an insubstantial degree, engage in any activities or exercise any powers that are not in furtherance of the purposes of this corporation. Federal ez form ” Sixth: Upon the dissolution of the corporation, assets shall be distributed for one or more exempt purposes within the meaning of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose. Federal ez form Any such assets not so disposed of shall be disposed of by a Court of Competent Jurisdiction of the county in which the principal office of the corporation is then located, exclusively for such purposes or to such organization or organizations, as said Court shall determine, which are organized and operated exclusively for such purposes. Federal ez form   In witness whereof, we have hereunto subscribed our names this day of , 20. Federal ez form Appendix. Federal ez form Sample Articles of Organization, continued Draft B The Charitable Trust. Federal ez form Declaration of Trust made as of the day of , 20 , by , of , and , of , who hereby declare and agree that they have received this day from , as Donor, the sum of Ten Dollars ($10) and that they will hold and manage the same, and any additions to it, in trust, as follows: First: This trust shall be called “The Charitable Trust. Federal ez form ” Second: The trustees may receive and accept property, whether real, personal, or mixed, by way of gift, bequest, or devise, from any person, firm, trust, or corporation, to be held, administered, and disposed of in accordance with and pursuant to the provisions of this Declaration of Trust; but no gift, bequest, or devise of any such property shall be received and accepted if it is conditioned or limited in such manner as to require the disposition of the income or its principal to any person or organization other than a “charitable organization” or for other than “charitable purposes” within the meaning of such terms as defined in Article Third of this Declaration of Trust, or as shall, in the opinion of the trustees, jeopardize the federal income tax exemption of this trust pursuant to section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. Federal ez form Third: a) The principal and income of all property received and accepted by the trustees to be administered under this Declaration of Trust shall be held in trust by them, and the trustees may make payments or distributions from income or principal, or both, to or for the use of such charitable organizations, within the meaning of that term as defined in paragraph C, in such amounts and for such charitable purposes of the trust as the trustees shall from time to time select and determine; and the trustees may make payments or distributions from income or principal, or both, directly for such charitable purposes, within the meaning of that term as defined in paragraph D, in such amounts as the trustees shall from time to time select and determine without making use of any other charitable organization. Federal ez form The trustees may also make payments or distributions of all or any part of the income or principal to states, territories, or possessions of the United States, any political subdivision of any of the foregoing, or to the United States or the District of Columbia but only for charitable purposes within the meaning of that term as defined in paragraph D. Federal ez form Income or principal derived from contributions by corporations shall be distributed by the trustees for use solely within the United States or its possessions. Federal ez form No part of the net earnings of this trust shall inure or be payable to or for the benefit of any private shareholder or individual, and no substantial part of the activities of this trust shall be the carrying on of propaganda, or otherwise attempting to influence legislation. Federal ez form No part of the activities of this trust shall be the participation in, or intervention in (including the publishing or distributing of statements), any political campaign on behalf of or in opposition to any candidate for public office. Federal ez form b) The trust shall continue forever unless the trustees terminate it and distribute all of the principal and income, which action may be taken by the trustees in their discretion at any time. Federal ez form On such termination, assets shall be distributed for one or more exempt purposes within the meaning of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose. Federal ez form The donor authorizes and empowers the trustees to form and organize a nonprofit corporation limited to the uses and purposes provided for in this Declaration of Trust, such corporation to be organized under the laws of any state or under the laws of the United States as may be determined by the trustees; such corporation when organized to have power to administer and control the affairs and property and to carry out the uses, objects, and purposes of this trust. Federal ez form Upon the creation and organization of such corporation, the trustees are authorized and empowered to convey, transfer, and deliver to such corporation all the property and assets to which this trust may be or become entitled. Federal ez form The charter, bylaws, and other provisions for the organization and management of such corporation and its affairs and property shall be such as the trustees shall determine, consistent with the provisions of this paragraph. Federal ez form c) In this Declaration of Trust and in any amendments to it, references to “charitable organizations” or “charitable organization” mean corporations, trusts, funds, foundations, or community chests created or organized in the United States or in any of its possessions, whether under the laws of the United States, any state or territory, the District of Columbia, or any possession of the United States, organized and operated exclusively for charitable purposes, no part of the net earnings of which inures or is payable to or for the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation, and which do not participate in or intervene in (including the publishing or distributing of statements) any political campaign on behalf of or in opposition to any candidate for public office. Federal ez form It is intended that the organization described in this paragraph C shall be entitled to exemption from federal income tax under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. Federal ez form d) In this Declaration of Trust and in any amendments to it, the term “charitable purposes” shall be limited to and shall include only religious, charitable, scientific, literary, or educational purposes within the meaning of those terms as used in section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, but only such purposes as also constitute public charitable purposes under the law of trusts of the State of. Federal ez form Fourth: This Declaration of Trust may be amended at any time or times by written instrument or instruments signed and sealed by the trustees, and acknowledged by any of the trustees, provided that no amendment shall authorize the trustees to conduct the affairs of this trust in any manner or for any purpose contrary to the provisions of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. Federal ez form An amendment of the provisions of this Article Fourth (or any amendment to it) shall be valid only if and to the extent that such amendment further restricts the trustees' amending power. Federal ez form All instruments amending this Declaration of Trust shall be noted upon or kept attached to the executed original of this Declaration of Trust held by the trustees. Federal ez form Fifth: Any trustee under this Declaration of Trust may, by written instrument, signed and acknowledged, resign his office. Federal ez form The number of trustees shall be at all times not less than two, and whenever for any reason the number is reduced to one, there shall be, and at any other time there may be, appointed one or more additional trustees. Federal ez form Appointments shall be made by the trustee or trustees for the time in office by written instruments signed and acknowledged. Federal ez form Any succeeding or additional trustee shall, upon his or her acceptance of the office by written instrument signed and acknowledged, have the same powers, rights, and duties, and the same title to the trust estate jointly with the surviving or remaining trustee or trustees as if originally appointed. Federal ez form  None of the trustees shall be required to furnish any bond or surety. Federal ez form None of them shall be responsible or liable for the acts or omissions of any other of the trustees or of any predecessor or of a custodian, agent, depositary, or counsel selected with reasonable care. Federal ez form  The one or more trustees, whether original or successor, for the time being in office, shall have full authority to act even though one or more vacancies may exist. Federal ez form A trustee may, by appropriate written instrument, delegate all or any part of his or her powers to another or others of the trustees for such periods and subject to such conditions as such delegating trustee may determine. Federal ez form  The trustees serving under this Declaration of Trust are authorized to pay to themselves amounts for reasonable expenses incurred and reasonable compensation for services rendered in the administration of this trust, but in no event shall any trustee who has made a contribution to this trust ever receive any compensation thereafter. Federal ez form Sixth: In extension and not in limitation of the common law and statutory powers of trustees and other powers granted in this Declaration of Trust, the trustees shall have the following discretionary powers. Federal ez form a) To invest and reinvest the principal and income of the trust in such property, real, personal, or mixed, and in such manner as they shall deem proper, and from time to time to change investments as they shall deem advisable; to invest in or retain any stocks, shares, bonds, notes, obligations, or personal or real property (including without limitation any interests in or obligations of any corporation, association, business trust, investment trust, common trust fund, or investment company) although some or all of the property so acquired or retained is of a kind or size which but for this express authority would not be considered proper and although all of the trust funds are invested in the securities of one company. Federal ez form No principal or income, however, shall be loaned, directly or indirectly, to any trustee or to anyone else, corporate or otherwise, who has at any time made a contribution to this trust, nor to anyone except on the basis of an adequate interest charge and with adequate security. Federal ez form b) To sell, lease, or exchange any personal, mixed, or real property, at public auction or by private contract, for such consideration and on such terms as to credit or otherwise, and to make such contracts and enter into such undertakings relating to the trust property, as they consider advisable, whether or not such leases or contracts may extend beyond the duration of the trust. Federal ez form c) To borrow money for such periods, at such rates of interest, and upon such terms as the trustees consider advisable, and as security for such loans to mortgage or pledge any real or personal property with or without power of sale; to acquire or hold any real or personal property, subject to any mortgage or pledge on or of property acquired or held by this trust. Federal ez form d) To execute and deliver deeds, assignments, transfers, mortgages, pledges, leases, covenants, contracts, promissory notes, releases, and other instruments, sealed or unsealed, incident to any transaction in which they engage. Federal ez form e) To vote, to give proxies, to participate in the reorganization, merger, or consolidation of any concern, or in the sale, lease, disposition, or distribution of its assets; to join with other security holders in acting through a committee, depositary, voting trustees, or otherwise, and in this connection to delegate authority to such committee, depositary, or trustees and to deposit securities with them or transfer securities to them; to pay assessments levied on securities or to exercise subscription rights in respect of securities. Federal ez form f) To employ a bank or trust company as custodian of any funds or securities and to delegate to it such powers as they deem appropriate; to hold trust property without indication of fiduciary capacity but only in the name of a registered nominee, provided the trust property is at all times identified as such on the books of the trust; to keep any or all of the trust property or funds in any place or places in the United States of America; to employ clerks, accountants, investment counsel, investment agents, and any special services, and to pay the reasonable compensation and expenses of all such services in addition to the compensation of the trustees. Federal ez form Seventh: The trustees' powers are exercisable solely in the fiduciary capacity consistent with and in furtherance of the charitable purposes of this trust as specified in Article Third and not otherwise. Federal ez form Eighth: In this Declaration of Trust and in any amendment to it, references to “trustees” mean the one or more trustees, whether original or successor, for the time being in office. Federal ez form Ninth: Any person may rely on a copy, certified by a notary public, of the executed original of this Declaration of Trust held by the trustees, and of any of the notations on it and writings attached to it, as fully as he might rely on the original documents themselves. Federal ez form Any such person may rely fully on any statements of fact certified by anyone who appears from such original documents or from such certified copy to be a trustee under this Declaration of Trust. Federal ez form No one dealing with the trustees need inquire concerning the validity of anything the trustees purport to do. Federal ez form No one dealing with the trustees need see to the application of anything paid or transferred to or upon the order of the trustees of the trust. Federal ez form Tenth: This Declaration of Trust is to be governed in all respects by the laws of the State of . Federal ez form Trustee Trustee Prev  Up  Next   Home   More Online Publications
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The Federal Ez Form

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