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Free Federal And State E File

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Free Federal And State E File

Free federal and state e file Publication 515 - Main Content Table of Contents Withholding of TaxWithholding Agent Withholding and Reporting Obligations Persons Subject to NRA WithholdingIdentifying the Payee Foreign Persons DocumentationBeneficial Owners Foreign Intermediaries and Foreign Flow-Through Entities Standards of Knowledge Presumption Rules Income Subject to NRA WithholdingSource of Income Fixed or Determinable Annual or Periodical Income (FDAP) Withholding on Specific IncomeEffectively Connected Income Income Not Effectively Connected Pay for Personal Services Performed Artists and Athletes (Income Codes 42 and 43) Other Income Foreign Governments and Certain Other Foreign Organizations U. Free federal and state e file S. Free federal and state e file Taxpayer Identification NumbersUnexpected payment. Free federal and state e file Depositing Withheld TaxesWhen Deposits Are Required Adjustment for Overwithholding Returns RequiredJoint owners. Free federal and state e file Electronic reporting. Free federal and state e file Partnership Withholding on Effectively Connected IncomeWho Must Withhold Foreign Partner Publicly Traded Partnerships U. Free federal and state e file S. Free federal and state e file Real Property InterestForeign corporations. Free federal and state e file Domestic corporations. Free federal and state e file U. Free federal and state e file S. Free federal and state e file real property holding corporations. Free federal and state e file Partnerships. Free federal and state e file Trusts and estates. Free federal and state e file Domestically controlled QIE. Free federal and state e file Late filing of certifications or notices. Free federal and state e file Certifications. Free federal and state e file Liability of agent or qualified substitute. Free federal and state e file Reporting and Paying the Tax Withholding Certificates Tax Treaty TablesTable 1 Table 2 Table 3 How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Free federal and state e file Withholding of Tax In most cases, a foreign person is subject to U. Free federal and state e file S. Free federal and state e file tax on its U. Free federal and state e file S. Free federal and state e file source income. Free federal and state e file Most types of U. Free federal and state e file S. Free federal and state e file source income received by a foreign person are subject to U. Free federal and state e file S. Free federal and state e file tax of 30%. Free federal and state e file A reduced rate, including exemption, may apply if there is a tax treaty between the foreign person's country of residence and the United States. Free federal and state e file The tax is generally withheld (NRA withholding) from the payment made to the foreign person. Free federal and state e file The term “NRA withholding” is used in this publication descriptively to refer to withholding required under sections 1441, 1442, and 1443 of the Internal Revenue Code. Free federal and state e file In most cases, NRA withholding describes the withholding regime that requires withholding on a payment of U. Free federal and state e file S. Free federal and state e file source income. Free federal and state e file Payments to foreign persons, including nonresident alien individuals, foreign entities, and governments, may be subject to NRA withholding. Free federal and state e file NRA withholding does not include withholding under section 1445 of the Code (see U. Free federal and state e file S. Free federal and state e file Real Property Interest, later) or under section 1446 of the Code (see Partnership Withholding on Effectively Connected Income , later). Free federal and state e file A withholding agent (defined next) is the person responsible for withholding on payments made to a foreign person. Free federal and state e file However, a withholding agent that can reliably associate the payment with documentation (discussed later) from a U. Free federal and state e file S. Free federal and state e file person is not required to withhold. Free federal and state e file In addition, a withholding agent may apply a reduced rate of withholding (including an exemption from withholding) if it can reliably associate the payment with documentation from a beneficial owner that is a foreign person entitled to a reduced rate of withholding. Free federal and state e file Withholding Agent You are a withholding agent if you are a U. Free federal and state e file S. Free federal and state e file or foreign person that has control, receipt, custody, disposal, or payment of any item of income of a foreign person that is subject to withholding. Free federal and state e file A withholding agent may be an individual, corporation, partnership, trust, association, nominee (under section 1446 of the Code), or any other entity, including any foreign intermediary, foreign partnership, or U. Free federal and state e file S. Free federal and state e file branch of certain foreign banks and insurance companies. Free federal and state e file You may be a withholding agent even if there is no requirement to withhold from a payment or even if another person has withheld the required amount from the payment. Free federal and state e file Although several persons may be withholding agents for a single payment, the full tax is required to be withheld only once. Free federal and state e file In most cases, the U. Free federal and state e file S. Free federal and state e file person who pays an amount subject to NRA withholding is the person responsible for withholding. Free federal and state e file However, other persons may be required to withhold. Free federal and state e file For example, a payment made by a flow-through entity or nonqualified intermediary that knows, or has reason to know, that the full amount of NRA withholding was not done by the person from which it receives a payment is required to do the appropriate withholding since it also falls within the definition of a withholding agent. Free federal and state e file In addition, withholding must be done by any qualified intermediary, withholding foreign partnership, or withholding foreign trust in accordance with the terms of its withholding agreement, discussed later. Free federal and state e file Liability for tax. Free federal and state e file   As a withholding agent, you are personally liable for any tax required to be withheld. Free federal and state e file This liability is independent of the tax liability of the foreign person to whom the payment is made. Free federal and state e file If you fail to withhold and the foreign payee fails to satisfy its U. Free federal and state e file S. Free federal and state e file tax liability, then both you and the foreign person are liable for tax, as well as interest and any applicable penalties. Free federal and state e file   The applicable tax will be collected only once. Free federal and state e file If the foreign person satisfies its U. Free federal and state e file S. Free federal and state e file tax liability, you are not liable for the tax but remain liable for any interest and penalties for failure to withhold. Free federal and state e file Determination of amount to withhold. Free federal and state e file   You must withhold on the gross amount subject to NRA withholding. Free federal and state e file You cannot reduce the gross amount by any deductions. Free federal and state e file However, see Scholarships and Fellowship Grants and Pay for Personal Services Performed , later, for when a deduction for a personal exemption may be allowed. Free federal and state e file   If the determination of the source of the income or the amount subject to tax depends on facts that are not known at the time of payment, you must withhold an amount sufficient to ensure that at least 30% of the amount subsequently determined to be subject to withholding is withheld. Free federal and state e file In no case, however, should you withhold more than 30% of the total amount paid. Free federal and state e file Or, you may make a reasonable estimate of the amount from U. Free federal and state e file S. Free federal and state e file sources and put a corresponding part of the amount due in escrow until the amount from U. Free federal and state e file S. Free federal and state e file sources can be determined, at which time withholding becomes due. Free federal and state e file When to withhold. Free federal and state e file   Withholding is required at the time you make a payment of an amount subject to withholding. Free federal and state e file A payment is made to a person if that person realizes income, whether or not there is an actual transfer of cash or other property. Free federal and state e file A payment is considered made to a person if it is paid for that person's benefit. Free federal and state e file For example, a payment made to a creditor of a person in satisfaction of that person's debt to the creditor is considered made to the person. Free federal and state e file A payment also is considered made to a person if it is made to that person's agent. Free federal and state e file   A U. Free federal and state e file S. Free federal and state e file partnership should withhold when any distributions that include amounts subject to withholding are made. Free federal and state e file However, if a foreign partner's distributive share of income subject to withholding is not actually distributed, the U. Free federal and state e file S. Free federal and state e file partnership must withhold on the foreign partner's distributive share of the income on the earlier of the date that a Schedule K-1 (Form 1065) is provided or mailed to the partner or the due date for furnishing that schedule. Free federal and state e file If the distributable amount consists of effectively connected income, see Partnership Withholding on Effectively Connected Income , later. Free federal and state e file A U. Free federal and state e file S. Free federal and state e file trust is required to withhold on the amount includible in the gross income of a foreign beneficiary to the extent the trust's distributable net income consists of an amount subject to withholding. Free federal and state e file To the extent a U. Free federal and state e file S. Free federal and state e file trust is required to distribute an amount subject to withholding but does not actually distribute the amount, it must withhold on the foreign beneficiary's allocable share at the time the income is required to be reported on Form 1042-S. Free federal and state e file Withholding and Reporting Obligations You are required to report payments subject to NRA withholding on Form 1042-S and to file a tax return on Form 1042. Free federal and state e file (See Returns Required , later. Free federal and state e file ) An exception from reporting may apply to individuals who are not required to withhold from a payment and who do not make the payment in the course of their trade or business. Free federal and state e file Form 1099 reporting and backup withholding. Free federal and state e file    You also may be responsible as a payer for reporting on Form 1099 payments made to a U. Free federal and state e file S. Free federal and state e file person. Free federal and state e file You must withhold 28% (backup withholding rate) from a reportable payment made to a U. Free federal and state e file S. Free federal and state e file person that is subject to Form 1099 reporting if any of the following apply. Free federal and state e file The U. Free federal and state e file S. Free federal and state e file person has not provided its taxpayer identification number (TIN) in the manner required. Free federal and state e file The IRS notifies you that the TIN furnished by the payee is incorrect. Free federal and state e file There has been a notified payee underreporting. Free federal and state e file There has been a payee certification failure. Free federal and state e file In most cases, a TIN must be provided by a U. Free federal and state e file S. Free federal and state e file non-exempt recipient on Form W-9, Request for Taxpayer Identification Number and Certification. Free federal and state e file A payer files a tax return on Form 945, Annual Return of Withheld Federal Income Tax, for backup withholding. Free federal and state e file You may be required to file Form 1099 and, if appropriate, backup withhold, even if you do not make the payments directly to that U. Free federal and state e file S. Free federal and state e file person. Free federal and state e file For example, you are required to report income paid to a foreign intermediary or flow-through entity that collects for a U. Free federal and state e file S. Free federal and state e file person subject to Form 1099 reporting. Free federal and state e file See Identifying the Payee , later, for more information. Free federal and state e file Also see Section S. Free federal and state e file Special Rules for Reporting Payments Made Through Foreign Intermediaries and Foreign Flow-Through Entities on Form 1099 in the General Instructions for Certain Information Returns. Free federal and state e file Foreign persons who provide Form W-8BEN, Form W-8ECI, or Form W-8EXP (or applicable documentary evidence) are exempt from backup withholding and Form 1099 reporting. Free federal and state e file Wages paid to employees. Free federal and state e file   If you are the employer of a nonresident alien, you generally must withhold taxes at graduated rates. Free federal and state e file See Pay for Personal Services Performed , later. Free federal and state e file Effectively connected income by partnerships. Free federal and state e file   A withholding agent that is a partnership (whether U. Free federal and state e file S. Free federal and state e file or foreign) is also responsible for withholding on its income effectively connected with a U. Free federal and state e file S. Free federal and state e file trade or business that is allocable to foreign partners. Free federal and state e file See Partnership Withholding on Effectively Connected Income , later, for more information. Free federal and state e file U. Free federal and state e file S. Free federal and state e file real property interest. Free federal and state e file   A withholding agent also may be responsible for withholding if a foreign person transfers a U. Free federal and state e file S. Free federal and state e file real property interest to the agent, or if it is a corporation, partnership, trust, or estate that distributes a U. Free federal and state e file S. Free federal and state e file real property interest to a shareholder, partner, or beneficiary that is a foreign person. Free federal and state e file See U. Free federal and state e file S. Free federal and state e file Real Property Interest , later. Free federal and state e file Persons Subject to NRA Withholding NRA withholding applies only to payments made to a payee that is a foreign person. Free federal and state e file It does not apply to payments made to U. Free federal and state e file S. Free federal and state e file persons. Free federal and state e file Usually, you determine the payee's status as a U. Free federal and state e file S. Free federal and state e file or foreign person based on the documentation that person provides. Free federal and state e file See Documentation , later. Free federal and state e file However, if you have received no documentation or you cannot reliably associate all or a part of a payment with documentation, then you must apply certain presumption rules, discussed later. Free federal and state e file Identifying the Payee In most cases, the payee is the person to whom you make the payment, regardless of whether that person is the beneficial owner of the income. Free federal and state e file However, there are situations in which the payee is a person other than the one to whom you actually make a payment. Free federal and state e file U. Free federal and state e file S. Free federal and state e file agent of foreign person. Free federal and state e file   If you make a payment to a U. Free federal and state e file S. Free federal and state e file person and you have actual knowledge that the U. Free federal and state e file S. Free federal and state e file person is receiving the payment as an agent of a foreign person, you must treat the payment as made to the foreign person. Free federal and state e file However, if the U. Free federal and state e file S. Free federal and state e file person is a financial institution, you may treat the institution as the payee provided you have no reason to believe that the institution will not comply with its own obligation to withhold. Free federal and state e file   If the payment is not subject to NRA withholding (for example, gross proceeds from the sales of securities), you must treat the payment as made to a U. Free federal and state e file S. Free federal and state e file person and not as a payment to a foreign person. Free federal and state e file You may be required to report the payment on Form 1099 and, if applicable, backup withhold. Free federal and state e file Disregarded entities. Free federal and state e file   A business entity that is not a corporation and that has a single owner may be disregarded as an entity separate from its owner (a disregarded entity) for federal tax purposes. Free federal and state e file The payee of a payment made to a disregarded entity is the owner of the entity. Free federal and state e file   If the owner of the entity is a foreign person, you must apply NRA withholding unless you can treat the foreign owner as a beneficial owner entitled to a reduced rate of withholding. Free federal and state e file   If the owner is a U. Free federal and state e file S. Free federal and state e file person, you do not apply NRA withholding. Free federal and state e file However, you may be required to report the payment on Form 1099 and, if applicable, backup withhold. Free federal and state e file You may assume that a foreign entity is not a disregarded entity unless you can reliably associate the payment with documentation provided by the owner or you have actual knowledge or reason to know that the foreign entity is a disregarded entity. Free federal and state e file Flow-Through Entities The payees of payments (other than income effectively connected with a U. Free federal and state e file S. Free federal and state e file trade or business) made to a foreign flow-through entity are the owners or beneficiaries of the flow-through entity. Free federal and state e file This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. Free federal and state e file Income that is, or is deemed to be, effectively connected with the conduct of a U. Free federal and state e file S. Free federal and state e file trade or business of a flow-through entity is treated as paid to the entity. Free federal and state e file All of the following are flow-through entities. Free federal and state e file A foreign partnership (other than a withholding foreign partnership). Free federal and state e file A foreign simple or foreign grantor trust (other than a withholding foreign trust). Free federal and state e file A fiscally transparent entity receiving income for which treaty benefits are claimed. Free federal and state e file See Fiscally transparent entity , later. Free federal and state e file In most cases, you treat a payee as a flow-through entity if it provides you with a Form W-8IMY (see Documentation , later) on which it claims such status. Free federal and state e file You also may be required to treat the entity as a flow-through entity under the presumption rules, discussed later. Free federal and state e file You must determine whether the owners or beneficiaries of a flow-through entity are U. Free federal and state e file S. Free federal and state e file or foreign persons, how much of the payment relates to each owner or beneficiary, and, if the owner or beneficiary is foreign, whether a reduced rate of NRA withholding applies. Free federal and state e file You make these determinations based on the documentation and other information (contained in a withholding statement) that is associated with the flow-through entity's Form W-8IMY. Free federal and state e file If you do not have all of the information that is required to reliably associate a payment with a specific payee, you must apply the presumption rules. Free federal and state e file See Documentation and Presumption Rules , later. Free federal and state e file Withholding foreign partnerships and withholding foreign trusts are not flow-through entities. Free federal and state e file Foreign partnerships. Free federal and state e file    A foreign partnership is any partnership that is not organized under the laws of any state of the United States or the District of Columbia or any partnership that is treated as foreign under the income tax regulations. Free federal and state e file If a foreign partnership is not a withholding foreign partnership, the payees of income are the partners of the partnership, provided the partners are not themselves a flow-through entity or a foreign intermediary. Free federal and state e file However, the payee is the partnership itself if the partnership is claiming treaty benefits on the basis that it is not fiscally transparent and that it meets all the other requirements for claiming treaty benefits. Free federal and state e file If a partner is a foreign flow-through entity or a foreign intermediary, you apply the payee determination rules to that partner to determine the payees. Free federal and state e file Example 1. Free federal and state e file A nonwithholding foreign partnership has three partners: a nonresident alien individual; a foreign corporation; and a U. Free federal and state e file S. Free federal and state e file citizen. Free federal and state e file You make a payment of U. Free federal and state e file S. Free federal and state e file source interest to the partnership. Free federal and state e file It gives you a Form W-8IMY with which it associates Form W-8BEN from the nonresident alien; Form W-8BEN from the foreign corporation; and Form W-9 from the U. Free federal and state e file S. Free federal and state e file citizen. Free federal and state e file The partnership also gives you a complete withholding statement that enables you to associate a part of the interest payment to each partner. Free federal and state e file You must treat all three partners as the payees of the interest payment as if the payment were made directly to them. Free federal and state e file Report the payment to the nonresident alien and the foreign corporation on Forms 1042-S. Free federal and state e file Report the payment to the U. Free federal and state e file S. Free federal and state e file citizen on Form 1099-INT. Free federal and state e file Example 2. Free federal and state e file A nonwithholding foreign partnership has two partners: a foreign corporation and a nonwithholding foreign partnership. Free federal and state e file The second partnership has two partners, both nonresident alien individuals. Free federal and state e file You make a payment of U. Free federal and state e file S. Free federal and state e file source interest to the first partnership. Free federal and state e file It gives you a valid Form W-8IMY with which it associates a Form W-8BEN from the foreign corporation and a Form W-8IMY from the second partnership. Free federal and state e file In addition, Forms W-8BEN from the partners are associated with the Form W-8IMY from the second partnership. Free federal and state e file The Forms W-8IMY from the partnerships have complete withholding statements associated with them. Free federal and state e file Because you can reliably associate a part of the interest payment with the Form W-8BEN provided by the foreign corporation and the Forms W-8BEN provided by the nonresident alien individual partners as a result of the withholding statements, you must treat them as the payees of the interest. Free federal and state e file Example 3. Free federal and state e file You make a payment of U. Free federal and state e file S. Free federal and state e file source dividends to a withholding foreign partnership. Free federal and state e file The partnership has two partners, both foreign corporations. Free federal and state e file You can reliably associate the payment with a valid Form W-8IMY from the partnership on which it represents that it is a withholding foreign partnership. Free federal and state e file You must treat the partnership as the payee of the dividends. Free federal and state e file Foreign simple and grantor trust. Free federal and state e file   A trust is foreign unless it meets both of the following tests. Free federal and state e file A court within the United States is able to exercise primary supervision over the administration of the trust. Free federal and state e file One or more U. Free federal and state e file S. Free federal and state e file persons have the authority to control all substantial decisions of the trust. Free federal and state e file   In most cases, a foreign simple trust is a foreign trust that is required to distribute all of its income annually. Free federal and state e file A foreign grantor trust is a foreign trust that is treated as a grantor trust under sections 671 through 679 of the Code. Free federal and state e file   The payees of a payment made to a foreign simple trust are the beneficiaries of the trust. Free federal and state e file The payees of a payment made to a foreign grantor trust are the owners of the trust. Free federal and state e file However, the payee is the foreign simple or grantor trust itself if the trust is claiming treaty benefits on the basis that it is not fiscally transparent and that it meets all the other requirements for claiming treaty benefits. Free federal and state e file If the beneficiaries or owners are themselves flow-through entities or foreign intermediaries, you apply the payee determination rules to that beneficiary or owner to determine the payees. Free federal and state e file Example. Free federal and state e file A foreign simple trust has three beneficiaries: two nonresident alien individuals and a U. Free federal and state e file S. Free federal and state e file citizen. Free federal and state e file You make a payment of interest to the foreign trust. Free federal and state e file It gives you a Form W-8IMY with which it associates Forms W-8BEN from the nonresident aliens and a Form W-9 from the U. Free federal and state e file S. Free federal and state e file citizen. Free federal and state e file The trust also gives you a complete withholding statement that enables you to associate a part of the interest payment with the forms provided by each beneficiary. Free federal and state e file You must treat all three beneficiaries as the payees of the interest payment as if the payment were made directly to them. Free federal and state e file Report the payment to the nonresident aliens on Forms 1042-S. Free federal and state e file Report the payment to the U. Free federal and state e file S. Free federal and state e file citizen on Form 1099-INT. Free federal and state e file Fiscally transparent entity. Free federal and state e file   If a reduced rate of withholding under an income tax treaty is claimed, a flow-through entity includes any entity in which the interest holder must treat the entity as fiscally transparent. Free federal and state e file The determination of whether an entity is fiscally transparent is made on an item of income basis (that is, the determination is made separately for interest, dividends, royalties, etc. Free federal and state e file ). Free federal and state e file The interest holder in an entity makes the determination by applying the laws of the jurisdiction where the interest holder is organized, incorporated, or otherwise considered a resident. Free federal and state e file An entity is considered to be fiscally transparent for the income to the extent the laws of that jurisdiction require the interest holder to separately take into account on a current basis the interest holder's share of the income, whether or not distributed to the interest holder, and the character and source of the income to the interest holder are determined as if the income was realized directly from the source that paid it to the entity. Free federal and state e file Subject to the standards of knowledge rules discussed later, you generally make the determination that an entity is fiscally transparent based on a Form W-8IMY provided by the entity. Free federal and state e file   The payees of a payment made to a fiscally transparent entity are the interest holders of the entity. Free federal and state e file Example. Free federal and state e file Entity A is a business organization organized under the laws of country X that has an income tax treaty in force with the United States. Free federal and state e file A has two interest holders, B and C. Free federal and state e file B is a corporation organized under the laws of country Y. Free federal and state e file C is a corporation organized under the laws of country Z. Free federal and state e file Both countries Y and Z have an income tax treaty in force with the United States. Free federal and state e file A receives royalty income from U. Free federal and state e file S. Free federal and state e file sources that is not effectively connected with the conduct of a trade or business in the United States. Free federal and state e file For U. Free federal and state e file S. Free federal and state e file income tax purposes, A is treated as a partnership. Free federal and state e file Country X treats A as a partnership and requires the interest holders in A to separately take into account on a current basis their respective shares of the income paid to A even if the income is not distributed. Free federal and state e file The laws of country X provide that the character and source of the income to A's interest holders are determined as if the income was realized directly from the source that paid it to A. Free federal and state e file Accordingly, A is fiscally transparent in its jurisdiction, country X. Free federal and state e file B and C are not fiscally transparent under the laws of their respective countries of incorporation. Free federal and state e file Country Y requires B to separately take into account on a current basis B's share of the income paid to A, and the character and source of the income to B is determined as if the income was realized directly from the source that paid it to A. Free federal and state e file Accordingly, A is fiscally transparent for that income under the laws of country Y, and B is treated as deriving its share of the U. Free federal and state e file S. Free federal and state e file source royalty income for purposes of the U. Free federal and state e file S. Free federal and state e file -Y income tax treaty. Free federal and state e file Country Z, on the other hand, treats A as a corporation and does not require C to take into account its share of A's income on a current basis whether or not distributed. Free federal and state e file Therefore, A is not treated as fiscally transparent under the laws of country Z. Free federal and state e file Accordingly, C is not treated as deriving its share of the U. Free federal and state e file S. Free federal and state e file source royalty income for purposes of the U. Free federal and state e file S. Free federal and state e file -Z income tax treaty. Free federal and state e file Foreign Intermediaries In most cases, if you make payments to a foreign intermediary, the payees are the persons for whom the foreign intermediary collects the payment, such as account holders or customers, not the intermediary itself. Free federal and state e file This rule applies for purposes of NRA withholding and for Form 1099 reporting and backup withholding. Free federal and state e file You may, however, treat a qualified intermediary that has assumed primary withholding responsibility for a payment as the payee, and you are not required to withhold. Free federal and state e file An intermediary is a custodian, broker, nominee, or any other person that acts as an agent for another person. Free federal and state e file A foreign intermediary is either a qualified intermediary or a nonqualified intermediary. Free federal and state e file In most cases, you determine whether an entity is a qualified intermediary or a nonqualified intermediary based on the representations the intermediary makes on Form W-8IMY. Free federal and state e file You must determine whether the customers or account holders of a foreign intermediary are U. Free federal and state e file S. Free federal and state e file or foreign persons and, if the account holder or customer is foreign, whether a reduced rate of NRA withholding applies. Free federal and state e file You make these determinations based on the foreign intermediary's Form W-8IMY and associated information and documentation. Free federal and state e file If you do not have all of the information or documentation that is required to reliably associate a payment with a payee, you must apply the presumption rules. Free federal and state e file See Documentation and Presumption Rules , later. Free federal and state e file Nonqualified intermediary. Free federal and state e file   A nonqualified intermediary (NQI) is any intermediary that is a foreign person and that is not a qualified intermediary. Free federal and state e file The payees of a payment made to an NQI are the customers or account holders on whose behalf the NQI is acting. Free federal and state e file Example. Free federal and state e file You make a payment of interest to a foreign bank that is a nonqualified intermediary. Free federal and state e file The bank gives you a Form W-8IMY and the Forms W-8BEN of two foreign persons, and a Form W-9 from a U. Free federal and state e file S. Free federal and state e file person for whom the bank is collecting the payments. Free federal and state e file The bank also associates with its Form W-8IMY a withholding statement on which it allocates the interest payment to each account holder and provides all other information required to be on the withholding statement. Free federal and state e file The account holders are the payees of the interest payment. Free federal and state e file You should report the part of the interest paid to the two foreign persons on Forms 1042-S and the part paid to the U. Free federal and state e file S. Free federal and state e file person on Form 1099-INT. Free federal and state e file Qualified intermediary. Free federal and state e file   A qualified intermediary (QI) is any foreign intermediary (or foreign branch of a U. Free federal and state e file S. Free federal and state e file intermediary) that has entered into a qualified intermediary withholding agreement (discussed later) with the IRS. Free federal and state e file You may treat a QI as a payee to the extent the QI assumes primary withholding responsibility or primary Form 1099 reporting and backup withholding responsibility for a payment. Free federal and state e file In this situation, the QI is required to withhold the tax. Free federal and state e file You can determine whether a QI has assumed responsibility from the Form W-8IMY provided by the QI. Free federal and state e file   A payment to a QI to the extent it does not assume primary NRA withholding responsibility is considered made to the person on whose behalf the QI acts. Free federal and state e file If a QI does not assume Form 1099 reporting and backup withholding responsibility, you must report on Form 1099 and, if applicable, backup withhold as if you were making the payment directly to the U. Free federal and state e file S. Free federal and state e file person. Free federal and state e file Branches of financial institutions. Free federal and state e file   Branches of financial institutions are not permitted to operate as QIs if they are located outside of countries having approved “know-your-customer” (KYC) rules. Free federal and state e file The countries with approved KYC rules are listed on IRS. Free federal and state e file gov. Free federal and state e file QI withholding agreement. Free federal and state e file   Foreign financial institutions and foreign branches of U. Free federal and state e file S. Free federal and state e file financial institutions can enter into an agreement with the IRS to be a qualified intermediary. Free federal and state e file   A QI is entitled to certain simplified withholding and reporting rules. Free federal and state e file In general, there are three major areas whereby intermediaries with QI status are afforded such simplified treatment. Free federal and state e file   To apply for QI status, complete Form 14345, Qualified Intermediary Application, and Form SS-4, Application for Employer Identification Number. Free federal and state e file These forms, and the procedures required to obtain a QI withholding agreement are available at www. Free federal and state e file irs. Free federal and state e file gov/Businesses/Corporations/Qualified-Intermediaries-(QI). Free federal and state e file Documentation. Free federal and state e file   A QI is not required to forward documentation obtained from foreign account holders to the U. Free federal and state e file S. Free federal and state e file withholding agent from whom the QI receives a payment of U. Free federal and state e file S. Free federal and state e file source income. Free federal and state e file The QI maintains such documentation at its location and provides the U. Free federal and state e file S. Free federal and state e file withholding agent with withholding rate pools. Free federal and state e file A withholding rate pool is a payment of a single type of income that is subject to a single rate of withholding. Free federal and state e file   A QI is required to provide the U. Free federal and state e file S. Free federal and state e file withholding agent with information regarding U. Free federal and state e file S. Free federal and state e file persons subject to Form 1099 information reporting unless the QI assumes the primary obligation to do Form 1099 reporting and backup withholding. Free federal and state e file   If a QI obtains documentary evidence under the “know-your-customer” rules that apply to the QI under local law, and the documentary evidence is of a type specified in an attachment to the QI agreement, the documentary evidence remains valid until there is a change in circumstances or the QI knows the information is incorrect. Free federal and state e file This indefinite validity period rule does not apply to Forms W-8 or to documentary evidence that is not of the type specified in the attachment to the agreement. Free federal and state e file Form 1042-S reporting. Free federal and state e file   A QI is permitted to report payments made to its direct foreign account holders on a pooled basis rather than reporting payments to each direct account holder specifically. Free federal and state e file Pooled basis reporting is not available for payments to certain account holders, such as a nonqualified intermediary or a flow-through entity (discussed earlier). Free federal and state e file Collective refund procedures. Free federal and state e file   A QI may seek a refund on behalf of its direct account holders. Free federal and state e file The direct account holders, therefore, are not required to file returns with the IRS to obtain refunds, but rather may obtain them from the QI. Free federal and state e file U. Free federal and state e file S. Free federal and state e file branches of foreign banks and foreign insurance companies. Free federal and state e file   Special rules apply to a U. Free federal and state e file S. Free federal and state e file branch of a foreign bank subject to Federal Reserve Board supervision or a foreign insurance company subject to state regulatory supervision. Free federal and state e file If you agree to treat the branch as a U. Free federal and state e file S. Free federal and state e file person, you may treat the branch as a U. Free federal and state e file S. Free federal and state e file payee for a payment subject to NRA withholding provided you receive a Form W-8IMY from the U. Free federal and state e file S. Free federal and state e file branch on which the agreement is evidenced. Free federal and state e file If you treat the branch as a U. Free federal and state e file S. Free federal and state e file payee, you are not required to withhold. Free federal and state e file Even though you agree to treat the branch as a U. Free federal and state e file S. Free federal and state e file person, you must report the payment on Form 1042-S. Free federal and state e file   A financial institution organized in a U. Free federal and state e file S. Free federal and state e file possession is treated as a U. Free federal and state e file S. Free federal and state e file branch. Free federal and state e file The special rules discussed in this section apply to a possessions financial institution. Free federal and state e file   If you are paying a U. Free federal and state e file S. Free federal and state e file branch an amount that is not subject to NRA withholding, treat the payment as made to a foreign person, irrespective of any agreement to treat the branch as a U. Free federal and state e file S. Free federal and state e file person for amounts subject to NRA withholding. Free federal and state e file Consequently, amounts not subject to NRA withholding that are paid to a U. Free federal and state e file S. Free federal and state e file branch are not subject to Form 1099 reporting or backup withholding. Free federal and state e file   Alternatively, a U. Free federal and state e file S. Free federal and state e file branch may provide you with a Form W-8IMY with which it associates the documentation of the persons on whose behalf it acts. Free federal and state e file In this situation, the payees are the persons on whose behalf the branch acts provided you can reliably associate the payment with valid documentation from those persons. Free federal and state e file See Nonqualified Intermediaries under  Documentation, later. Free federal and state e file   If the U. Free federal and state e file S. Free federal and state e file branch does not provide you with a Form W-8IMY, then you should treat a payment subject to NRA withholding as made to the foreign person of which the branch is a part and the income as effectively connected with the conduct of a trade or business in the United States. Free federal and state e file Withholding foreign partnership and foreign trust. Free federal and state e file   A withholding foreign partnership (WP) is any foreign partnership that has entered into a WP withholding agreement with the IRS and is acting in that capacity. Free federal and state e file A withholding foreign trust (WT) is a foreign simple or grantor trust that has entered into a WT withholding agreement with the IRS and is acting in that capacity. Free federal and state e file   A WP or WT may act in that capacity only for payments of amounts subject to NRA withholding that are distributed to, or included in the distributive share of, its direct partners, beneficiaries, or owners. Free federal and state e file A WP or WT acting in that capacity must assume NRA withholding responsibility for these amounts. Free federal and state e file You may treat a WP or WT as a payee if it has provided you with documentation (discussed later) that represents that it is acting as a WP or WT for such amounts. Free federal and state e file WP and WT withholding agreements. Free federal and state e file   The WP and WT withholding agreements and the application procedures for the agreements are in Revenue Procedure 2003-64. Free federal and state e file Also see the following items. Free federal and state e file Revenue Procedure 2004-21. Free federal and state e file Revenue Procedure 2005-77. Free federal and state e file Employer identification number (EIN). Free federal and state e file   A completed Form SS-4 must be submitted with the application for being a WP or WT. Free federal and state e file The WP or WT will be assigned a WP-EIN or WT-EIN to be used only when acting in that capacity. Free federal and state e file Documentation. Free federal and state e file   A WP or WT must provide you with a Form W-8IMY that certifies that the WP or WT is acting in that capacity and a written statement identifying the amounts for which it is so acting. Free federal and state e file The statement is not required to contain withholding rate pool information or any information relating to the identity of a direct partner, beneficiary, or owner. Free federal and state e file The Form W-8IMY must contain the WP-EIN or WT-EIN. Free federal and state e file Foreign Persons A payee is subject to NRA withholding only if it is a foreign person. Free federal and state e file A foreign person includes a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, foreign estate, and any other person that is not a U. Free federal and state e file S. Free federal and state e file person. Free federal and state e file It also includes a foreign branch of a U. Free federal and state e file S. Free federal and state e file financial institution if the foreign branch is a qualified intermediary. Free federal and state e file In most cases, the U. Free federal and state e file S. Free federal and state e file branch of a foreign corporation or partnership is treated as a foreign person. Free federal and state e file Nonresident alien. Free federal and state e file   A nonresident alien is an individual who is not a U. Free federal and state e file S. Free federal and state e file citizen or a resident alien. Free federal and state e file A resident of a foreign country under the residence article of an income tax treaty is a nonresident alien individual for purposes of withholding. Free federal and state e file Married to U. Free federal and state e file S. Free federal and state e file citizen or resident alien. Free federal and state e file   Nonresident alien individuals married to U. Free federal and state e file S. Free federal and state e file citizens or resident aliens may choose to be treated as resident aliens for certain income tax purposes. Free federal and state e file However, these individuals are still subject to the NRA withholding rules that apply to nonresident aliens for all income except wages. Free federal and state e file Wages paid to these individuals are subject to graduated withholding. Free federal and state e file See Wages Paid to Employees—Graduated Withholding . Free federal and state e file Resident alien. Free federal and state e file   A resident alien is an individual who is not a citizen or national of the United States and who meets either the green card test or the substantial presence test for the calendar year. Free federal and state e file Green card test. Free federal and state e file An alien is a resident alien if the individual was a lawful permanent resident of the United States at any time during the calendar year. Free federal and state e file This is known as the green card test because these aliens hold immigrant visas (also known as green cards). Free federal and state e file Substantial presence test. Free federal and state e file An alien is considered a resident alien if the individual meets the substantial presence test for the calendar year. Free federal and state e file Under this test, the individual must be physically present in the United States on at least: 31 days during the current calendar year, and 183 days during the current year and the 2 preceding years, counting all the days of physical presence in the current year, but only 1/3 the number of days of presence in the first preceding year, and only 1/6 the number of days in the second preceding year. Free federal and state e file   In most cases, the days the alien is in the United States as a teacher, student, or trainee on an “F,” “J,” “M,” or “Q” visa are not counted. Free federal and state e file This exception is for a limited period of time. Free federal and state e file   For more information on resident and nonresident status, the tests for residence, and the exceptions to them, see Publication 519. Free federal and state e file Note. Free federal and state e file   If your employee is late in notifying you that his or her status changed from nonresident alien to resident alien, you may have to make an adjustment to Form 941 if that employee was exempt from withholding of social security and Medicare taxes as a nonresident alien. Free federal and state e file For more information on making adjustments, see chapter 13 of Publication 15 (Circular E). Free federal and state e file Resident of a U. Free federal and state e file S. Free federal and state e file possession. Free federal and state e file   A bona fide resident of Puerto Rico, the U. Free federal and state e file S. Free federal and state e file Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands (CNMI), or American Samoa who is not a U. Free federal and state e file S. Free federal and state e file citizen or a U. Free federal and state e file S. Free federal and state e file national is treated as a nonresident alien for the withholding rules explained here. Free federal and state e file A bona fide resident of a possession is someone who: Meets the presence test, Does not have a tax home outside the possession, and Does not have a closer connection to the United States or to a foreign country than to the possession. Free federal and state e file   For more information, see Publication 570, Tax Guide for Individuals With Income From U. Free federal and state e file S. Free federal and state e file Possessions. Free federal and state e file Foreign corporations. Free federal and state e file   A foreign corporation is one that does not fit the definition of a domestic corporation. Free federal and state e file A domestic corporation is one that was created or organized in the United States or under the laws of the United States, any of its states, or the District of Columbia. Free federal and state e file Guam or Northern Mariana Islands corporations. Free federal and state e file   A corporation created or organized in, or under the laws of, Guam or the CNMI is not considered a foreign corporation for the purpose of withholding tax for the tax year if: At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons; and At least 20% of the corporation's gross income is derived from sources within Guam or the CNMI for the 3-year period ending with the close of the preceding tax year of the corporation (or the period the corporation has been in existence, if less). Free federal and state e file Note. Free federal and state e file   The provisions discussed below under U. Free federal and state e file S. Free federal and state e file Virgin Islands and American Samoa corporations will apply to Guam or CNMI corporations when an implementing agreement is in effect between the United States and that possession. Free federal and state e file U. Free federal and state e file S. Free federal and state e file Virgin Islands and American Samoa corporations. Free federal and state e file   A corporation created or organized in, or under the laws of, the U. Free federal and state e file S. Free federal and state e file Virgin Islands or American Samoa is not considered a foreign corporation for the purposes of withholding tax for the tax year if: At all times during the tax year less than 25% in value of the corporation's stock is owned, directly or indirectly, by foreign persons, At least 65% of the corporation's gross income is effectively connected with the conduct of a trade or business in the U. Free federal and state e file S. Free federal and state e file Virgin Islands, American Samoa, Guam, the CNMI, or the United States for the 3-year period ending with the close of the tax year of the corporation (or the period the corporation or any predecessor has been in existence, if less), and No substantial part of the income of the corporation is used, directly or indirectly, to satisfy obligations to a person who is not a bona fide resident of the U. Free federal and state e file S. Free federal and state e file Virgin Islands, American Samoa, Guam, the CNMI, or the United States. Free federal and state e file Foreign private foundations. Free federal and state e file   A private foundation that was created or organized under the laws of a foreign country is a foreign private foundation. Free federal and state e file Gross investment income from sources within the United States paid to a qualified foreign private foundation is subject to NRA withholding at a 4% rate (unless exempted by a treaty) rather than the ordinary statutory 30% rate. Free federal and state e file Other foreign organizations, associations, and charitable institutions. Free federal and state e file   An organization may be exempt from income tax under section 501(a) of the Internal Revenue Code even if it was formed under foreign law. Free federal and state e file In most cases, you do not have to withhold tax on payments of income to these foreign tax-exempt organizations unless the IRS has determined that they are foreign private foundations. Free federal and state e file   Payments to these organizations, however, must be reported on Form 1042-S, even though no tax is withheld. Free federal and state e file   You must withhold tax on the unrelated business income (as described in Publication 598, Tax on Unrelated Business Income of Exempt Organizations) of foreign tax-exempt organizations in the same way that you would withhold tax on similar income of nonexempt organizations. Free federal and state e file U. Free federal and state e file S. Free federal and state e file branches of foreign persons. Free federal and state e file   In most cases, a payment to a U. Free federal and state e file S. Free federal and state e file branch of a foreign person is a payment made to the foreign person. Free federal and state e file However, you may treat payments to U. Free federal and state e file S. Free federal and state e file branches of foreign banks and foreign insurance companies (discussed earlier) that are subject to U. Free federal and state e file S. Free federal and state e file regulatory supervision as payments made to a U. Free federal and state e file S. Free federal and state e file person, if you and the U. Free federal and state e file S. Free federal and state e file branch have agreed to do so, and if their agreement is evidenced by a withholding certificate, Form W-8IMY. Free federal and state e file For this purpose, a financial institution organized under the laws of a U. Free federal and state e file S. Free federal and state e file possession is treated as a U. Free federal and state e file S. Free federal and state e file branch. Free federal and state e file Documentation In most cases, you must withhold 30% from the gross amount paid to a foreign payee unless you can reliably associate the payment with valid documentation that establishes either of the following. Free federal and state e file The payee is a U. Free federal and state e file S. Free federal and state e file person. Free federal and state e file The payee is a foreign person that is the beneficial owner of the income and is entitled to a reduced rate of withholding. Free federal and state e file In most cases, you must get the documentation before you make the payment. Free federal and state e file The documentation is not valid if you know, or have reason to know, that it is unreliable or incorrect. Free federal and state e file See Standards of Knowledge , later. Free federal and state e file If you cannot reliably associate a payment with valid documentation, you must use the presumption rules discussed later. Free federal and state e file For example, if you do not have documentation or you cannot determine the part of a payment that is allocable to specific documentation, you must use the presumption rules. Free federal and state e file The specific types of documentation are discussed in this section. Free federal and state e file However, see Withholding on Specific Income , later, as well as the instructions to the particular forms. Free federal and state e file As the withholding agent, you also may want to see the Instructions for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, and W-8IMY. Free federal and state e file Section 1446 withholding. Free federal and state e file   Under section 1446 of the Code, a partnership must withhold tax on its effectively connected income allocable to a foreign partner. Free federal and state e file In most cases, a partnership determines if a partner is a foreign partner and the partner's tax classification based on the withholding certificate provided by the partner. Free federal and state e file This is the same documentation that is filed for NRA withholding, but may require additional information as discussed under each of the forms in this section. Free federal and state e file Joint owners. Free federal and state e file    If you make a payment to joint owners, you need to get documentation from each owner. Free federal and state e file Form W-9. Free federal and state e file   In most cases, you can treat the payee as a U. Free federal and state e file S. Free federal and state e file person if the payee gives you a Form W-9. Free federal and state e file The Form W-9 can be used only by a U. Free federal and state e file S. Free federal and state e file person and must contain the payee's taxpayer identification number (TIN). Free federal and state e file If there is more than one owner, you may treat the total amount as paid to a U. Free federal and state e file S. Free federal and state e file person if any one of the owners gives you a Form W-9. Free federal and state e file See U. Free federal and state e file S. Free federal and state e file Taxpayer Identification Numbers , later. Free federal and state e file U. Free federal and state e file S. Free federal and state e file persons are not subject to NRA withholding, but may be subject to Form 1099 reporting and backup withholding. Free federal and state e file Form W-8. Free federal and state e file   In most cases, a foreign payee of the income should give you a form in the Form W-8 series. Free federal and state e file Until further notice, you can rely upon Forms W-8 that contain a P. Free federal and state e file O. Free federal and state e file box as a permanent residence address provided you do not know, or have reason to know, that the person providing the form is a U. Free federal and state e file S. Free federal and state e file person and that a street address is available. Free federal and state e file You may rely on Forms W-8 for which there is a U. Free federal and state e file S. Free federal and state e file mailing address provided you received the form prior to December 31, 2001. Free federal and state e file   If certain requirements are met, the foreign person can give you documentary evidence, rather than a Form W-8. Free federal and state e file You can rely on documentary evidence in lieu of a Form W-8 for a payment made in a U. Free federal and state e file S. Free federal and state e file possession. Free federal and state e file Other documentation. Free federal and state e file   Other documentation may be required to claim an exemption from, or a reduced rate of, withholding on pay for personal services. Free federal and state e file The nonresident alien individual may have to give you a Form W-4 or a Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual. Free federal and state e file These forms are discussed in Pay for Personal Services Performed under Withholding on Specific Income. Free federal and state e file Beneficial Owners If all the appropriate requirements have been established on a Form W-8BEN, W-8ECI, W-8EXP or, if applicable, on documentary evidence, you may treat the payee as a foreign beneficial owner. Free federal and state e file Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. Free federal and state e file   This form is used by a foreign person to: Establish foreign status; Claim that such person is the beneficial owner of the income for which the form is being furnished or a partner in a partnership subject to section 1446 withholding; and If applicable, claim a reduced rate of, or exemption from, withholding under an income tax treaty. Free federal and state e file   Form W-8BEN also may be used to claim that the foreign person is exempt from Form 1099 reporting and backup withholding for income that is not subject to NRA withholding. Free federal and state e file For example, a foreign person may provide a Form W-8BEN to a broker to establish that the gross proceeds from the sale of securities are not subject to Form 1099 reporting or backup withholding. Free federal and state e file Claiming treaty benefits. Free federal and state e file   You may apply a reduced rate of withholding to a foreign person that provides a Form W-8BEN claiming a reduced rate of withholding under an income tax treaty only if the person provides a U. Free federal and state e file S. Free federal and state e file TIN and certifies that: It is a resident of a treaty country; It is the beneficial owner of the income; If it is an entity, it derives the income within the meaning of section 894 of the Internal Revenue Code (it is not fiscally transparent); and It meets any limitation on benefits provision contained in the treaty, if applicable. Free federal and state e file   If the foreign beneficial owner claiming a treaty benefit is related to you, the foreign beneficial owner also must certify on Form W-8BEN that it will file Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), if the amount subject to NRA withholding received during a calendar year exceeds, in the aggregate, $500,000. Free federal and state e file   An entity derives income for which it is claiming treaty benefits only if the entity is not treated as fiscally transparent for that income. Free federal and state e file See Fiscally transparent entity discussed earlier under Flow-Through Entities. Free federal and state e file   Limitations on benefits provisions generally prohibit third country residents from obtaining treaty benefits. Free federal and state e file For example, a foreign corporation may not be entitled to a reduced rate of withholding unless a minimum percentage of its owners are citizens or residents of the United States or the treaty country. Free federal and state e file   The exemptions from, or reduced rates of, U. Free federal and state e file S. Free federal and state e file tax vary under each treaty. Free federal and state e file You must check the provisions of the tax treaty that apply. Free federal and state e file Tables at the end of this publication show the countries with which the United States has income tax treaties and the rates of withholding that apply in cases where all conditions of the particular treaty articles are satisfied. Free federal and state e file   If you know, or have reason to know, that an owner of income is not eligible for treaty benefits claimed, you must not apply the treaty rate. Free federal and state e file You are not, however, responsible for misstatements on a Form W-8, documentary evidence, or statements accompanying documentary evidence for which you did not have actual knowledge, or reason to know, that the statements were incorrect. Free federal and state e file Exceptions to TIN requirement. Free federal and state e file   A foreign person does not have to provide a TIN to claim a reduced rate of withholding under a treaty if the requirements for the following exceptions are met. Free federal and state e file Income from marketable securities (discussed next). Free federal and state e file Unexpected payments to an individual (discussed under U. Free federal and state e file S. Free federal and state e file Taxpayer Identification Numbers ). Free federal and state e file Marketable securities. Free federal and state e file   A Form W-8BEN provided to claim treaty benefits does not need a U. Free federal and state e file S. Free federal and state e file TIN if the foreign beneficial owner is claiming the benefits on income from marketable securities. Free federal and state e file For this purpose, income from a marketable security consists of the following items. Free federal and state e file Dividends and interest from stocks and debt obligations that are actively traded. Free federal and state e file Dividends from any redeemable security issued by an investment company registered under the Investment Company Act of 1940 (mutual fund). Free federal and state e file Dividends, interest, or royalties from units of beneficial interest in a unit investment trust that are (or were upon issuance) publicly offered and are registered with the SEC under the Securities Act of 1933. Free federal and state e file Income related to loans of any of the above securities. Free federal and state e file Offshore accounts. Free federal and state e file   If a payment is made outside the United States to an offshore account, a payee may give you documentary evidence, rather than Form W-8BEN. Free federal and state e file   In most cases, a payment is made outside the United States if you complete the acts necessary to effect the payment outside the United States. Free federal and state e file However, an amount paid by a bank or other financial institution on a deposit or account usually will be treated as paid at the branch or office where the amount is credited. Free federal and state e file An offshore account is an account maintained at an office or branch of a U. Free federal and state e file S. Free federal and state e file or foreign bank or other financial institution at any location outside the United States. Free federal and state e file   You may rely on documentary evidence given to you by a nonqualified intermediary or a flow-through entity with its Form W-8IMY. Free federal and state e file This rule applies even though you make the payment to a nonqualified intermediary or flow-through entity in the United States. Free federal and state e file In most cases, the nonqualified intermediary or flow-through entity that gives you documentary evidence also will have to give you a withholding statement, discussed later. Free federal and state e file Documentary evidence. Free federal and state e file   You may apply a reduced rate of withholding to income from marketable securities (discussed earlier) paid outside the United States to an offshore account if the beneficial owner gives you documentary evidence in place of a Form W-8BEN. Free federal and state e file To claim treaty benefits, the documentary evidence must be one of the following: A certificate of residence that: Is issued by a tax official of the treaty country of which the foreign beneficial owner claims to be a resident, States that the person has filed its most recent income tax return as a resident of that country, and Is issued within 3 years prior to being presented to you. Free federal and state e file Documentation for an individual that: Includes the individual's name, address, and photograph, Is an official document issued by an authorized governmental body, and Is issued no more than 3 years prior to being presented to you. Free federal and state e file Documentation for an entity that: Includes the name of the entity, Includes the address of its principal office in the treaty country, and Is an official document issued by an authorized governmental body. Free federal and state e file In addition to the documentary evidence, a foreign beneficial owner that is an entity must provide a statement that it derives the income for which it claims treaty benefits and that it meets one or more of the conditions set forth in a limitation on benefits article, if any, (or similar provision) contained in the applicable treaty. Free federal and state e file Form W-8ECI, Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States. Free federal and state e file   This form is used by a foreign person to: Establish foreign status, Claim that such person is the beneficial owner of the income for which the form is being furnished, and Claim that the income is effectively connected with the conduct of a trade or business in the United States. Free federal and state e file (See Effectively Connected Income , later. Free federal and state e file )   Effectively connected income for which a valid Form W-8ECI has been provided is generally not subject to NRA withholding. Free federal and state e file   If a partner submits this form to a partnership, the income claimed to be effectively connected with the conduct of a U. Free federal and state e file S. Free federal and state e file trade or business is subject to withholding under section 1446. Free federal and state e file If the partner has made, or will make, an election under section 871(d) or 882(d), the partner must submit Form W-8ECI, and attach a copy of the election, or a statement of intent to elect, to the form. Free federal and state e file    If the partner's only effectively connected income is the income allocated from the partnership and the partner is not making the election under section 871(d) or 882(d), the partner should provide Form W-8BEN to the partnership. Free federal and state e file Form W-8EXP, Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding. Free federal and state e file   This form is used by a foreign government, international organization, foreign central bank of issue, foreign tax-exempt organization, foreign private foundation, or government of a U. Free federal and state e file S. Free federal and state e file possession to: Establish foreign status, Claim that such person is the beneficial owner of the income for which the form is being furnished, and Claim a reduced rate of, or an exemption from, withholding as such an entity. Free federal and state e file   If the government or organization is a partner in a partnership carrying on a trade or business in the United States, the effectively connected income allocable to the partner is subject to withholding under section 1446. Free federal and state e file   See Foreign Governments and Certain Other Foreign Organizations , later. Free federal and state e file Foreign Intermediaries and Foreign Flow-Through Entities Payments made to a foreign intermediary or foreign flow-through entity are treated as made to the payees on whose behalf the intermediary or entity acts. Free federal and state e file The Form W-8IMY provided by a foreign intermediary or flow-through entity must be accompanied by additional information for you to be able to reliably associate the payment with a payee. Free federal and state e file The additional information required depends on the type of intermediary or flow-through entity and the extent of the withholding responsibilities it assumes. Free federal and state e file Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U. Free federal and state e file S. Free federal and state e file Branches for United States Tax Withholding. Free federal and state e file   This form is used by foreign intermediaries and foreign flow-through entities, as well as certain U. Free federal and state e file S. Free federal and state e file branches, to: Represent that a foreign person is a qualified intermediary or nonqualified intermediary, Represent, if applicable, that the qualified intermediary is assuming primary NRA withholding responsibility and/or primary Form 1099 reporting and backup withholding responsibility, Represent that a foreign partnership or a foreign simple or grantor trust is a withholding foreign partnership or a withholding foreign trust, Represent that a foreign flow-through entity is a nonwithholding foreign partnership, or a nonwithholding foreign trust and that the income is not effectively connected with the conduct of a trade or business in the United States, Represent that the provider is a U. Free federal and state e file S. Free federal and state e file branch of a foreign bank or insurance company and either is agreeing to be treated as a U. Free federal and state e file S. Free federal and state e file person or is transmitting documentation of the persons on whose behalf it is acting, or Represent that, for purposes of section 1446, it is an upper-tier foreign partnership or a foreign grantor trust and that the form is being used to transmit the required documentation. Free federal and state e file For information on qualifying as an upper-tier foreign partnership, see Regulations section 1. Free federal and state e file 1446-5. Free federal and state e file Qualified Intermediaries In most cases, a QI is any foreign intermediary that has entered into a QI withholding agreement (discussed earlier) with the IRS. Free federal and state e file A foreign intermediary that has received a QI employer identification number (QI-EIN) may represent on Form W-8IMY that it is a QI before it receives a fully executed agreement. Free federal and state e file The intermediary can claim that it is a QI until the IRS revokes its QI-EIN. Free federal and state e file The IRS will revoke a QI-EIN if the QI agreement is not executed and returned to the IRS within a reasonable period of time after the agreement was sent to the intermediary for signature. Free federal and state e file Responsibilities. Free federal and state e file   Payments made to a QI that does not assume NRA withholding responsibility are treated as paid to its account holders and customers. Free federal and state e file However, a QI is not required to provide you with documentation it obtains from its foreign account holders and customers. Free federal and state e file Instead, it provides you with a withholding statement that contains withholding rate pool information. Free federal and state e file A withholding rate pool is a payment of a single type of income, determined in accordance with the categories of income reported on Form 1042-S that is subject to a single rate of withholding. Free federal and state e file A qualified intermediary is required to provide you with information regarding U. Free federal and state e file S. Free federal and state e file persons subject to Form 1099 reporting and to provide you withholding rate pool information separately for each such U. Free federal and state e file S. Free federal and state e file person unless it has assumed Form 1099 reporting and backup withholding responsibility. Free federal and state e file For the alternative procedure for providing rate pool information for U. Free federal and state e file S. Free federal and state e file non-exempt persons, see the Form W-8IMY instructions. Free federal and state e file   The withholding statement must: Designate those accounts for which it acts as a qualified intermediary, Designate those accounts for which it assumes primary NRA withholding responsibility and/or primary Form 1099 and backup withholding responsibility, and Provide sufficient information for you to allocate the payment to a withholding rate pool. Free federal and state e file   The extent to which you must have withholding rate pool information depends on the withholding and reporting obligations assumed by the QI. Free federal and state e file Primary responsibility not assumed. Free federal and state e file   If a QI does not assume primary NRA withholding responsibility or primary Form 1099 reporting and backup withholding responsibility for the payment, you can reliably associate the payment with valid documentation only to the extent you can reliably determine the part of the payment that relates to each withholding rate pool for foreign payees. Free federal and state e file Unless the alternative procedure applies, the qualified intermediary must provide you with a separate withholding rate pool for each U. Free federal and state e file S. Free federal and state e file person subject to Form 1099 reporting and/or backup withholding. Free federal and state e file The QI must provide a Form W-9 or, in the absence of the form, the name, address, and TIN, if available, for such person. Free federal and state e file Primary NRA withholding responsibility assumed. Free federal and state e file   If you make a payment to a QI that assumes primary NRA withholding responsibility (but not primary Form 1099 reporting and backup withholding responsibility), you can reliably associate the payment with valid documentation only to the extent you can reliably determine the part of the payment that relates to the withholding rate pool for which the QI assumes primary NRA withholding responsibility and the part of the payment attributable to withholding rate pools for each U. Free federal and state e file S. Free federal and state e file person, unless the alternative procedure applies, subject to Form 1099 reporting and/or backup withholding. Free federal and state e file The QI must provide a Form W-9 or, in the absence of the form, the name, address, and TIN, if available, for such person. Free federal and state e file Primary NRA and Form 1099 responsibility assumed. Free federal and state e file   If you make a payment to a QI that assumes both primary NRA withholding responsibility and primary Form 1099 reporting and backup withholding responsibility, you can reliably associate a payment with valid documentation provided that you receive a valid Form W-8IMY. Free federal and state e file It is not necessary to associate the payment with withholding rate pools. Free federal and state e file Example. Free federal and state e file You make a payment of dividends to a QI. Free federal and state e file It has five customers: two are foreign persons who have provided documentation entitling them to a 15% rate of withholding on dividends; two are foreign persons subject to a 30% rate of withholding on dividends; and one is a U. Free federal and state e file S. Free federal and state e file individual who provides it with a Form W-9. Free federal and state e file Each customer is entitled to 20% of the dividend payment. Free federal and state e file The QI does not assume any primary withholding responsibility. Free federal and state e file The QI gives you a Form W-8IMY with which it associates the Form W-9 and a withholding statement that allocates 40% of the dividend to a 15% withholding rate pool, 40% to a 30% withholding rate pool, and 20% to the U. Free federal and state e file S. Free federal and state e file individual. Free federal and state e file You should report on Forms 1042-S 40% of the payment as made to a 15% rate dividend pool and 40% of the payment as made to a 30% rate dividend pool. Free federal and state e file The part of the payment allocable to the U. Free federal and state e file S. Free federal and state e file individual (20%) is reportable on Form 1099-DIV. Free federal and state e file Smaller partnerships and trusts. Free federal and state e file   A QI may apply special rules to a smaller partnership or trust (Joint Account Provision) only if the partnership or trust meets the following conditions. Free federal and state e file It is a foreign partnership or foreign simple or grantor trust. Free federal and state e file It is a direct account holder of the QI. Free federal and state e file It does not have any partner, beneficiary, or owner that is a U. Free federal and state e file S. Free federal and state e file person or a pass- through partner, beneficiary, or owner. Free federal and state e file   For information on these rules, see section 4A. Free federal and state e file 01 of the QI agreement. Free federal and state e file This is found in Appendix 3 of Revenue Procedure 2003-64. Free federal and state e file Also see Revenue Procedure 2004-21. Free federal and state e file Related partnerships and trusts. Free federal and state e file    A QI may apply special rules to a related partnership or trust only if the partnership or trust meets the following conditions. Free federal and state e file It is a foreign partnership or foreign simple or grantor trust. Free federal and state e file It is either: A direct account holder of the QI, or An indirect account holder of the QI that is a direct partner, beneficiary, or owner of a partnership or trust to which the QI has applied this rule. Free federal and state e file For information on these rules, see section 4A. Free federal and state e file 02 of the QI agreement. Free federal and state e file This is found in Appendix 3 of Revenue Procedure 2003-64. Free federal and state e file Also see Revenue Procedure 2005-77. Free federal and state e file Nonqualified Intermediaries If you are making a payment to an NQI, foreign flow-through entity, or U. Free federal and state e file S. Free federal and state e file branch that is using Form W-8IMY to transmit information about the branch's account holders or customers, you can treat the payment (or a part of the payment) as reliably associated with valid documentation from a specific payee only if, prior to making the payment: You can allocate the payment to a valid Form W-8IMY, You can reliably determine how much of the payment relates to valid documentation provided by a payee (a person that is not itself a foreign intermediary, flow- through entity, or U. Free federal and state e file S. Free federal and state e file branch), and You have sufficient information to report the payment on Form 1042-S or Form 1099, if reporting is required. Free federal and state e file The NQI, flow-through entity, or U. Free federal and state e file S. Free federal and state e file branch must give you certain information on a withholding statement that is associated with the Form W-8IMY. Free federal and state e file A withholding statement must be updated to keep the information accurate prior to each payment. Free federal and state e file Withholding statement. Free federal and state e file   In most cases, a withholding statement must contain the following information. Free federal and state e file The name, address, and TIN (if any, or if required) of each person for whom documentation is provided. Free federal and state e file The type of documentation (documentary evidence, Form W-8, or Form W-9) for every person for whom documentation has been provided. Free federal and state e file The status of the person for whom the documentation has been provided, such as whether the person is a U. Free federal and state e file S. Free federal and state e file exempt recipient (U. Free federal and state e file S. Free federal and state e file person exempt from Form 1099 reporting), U. Free federal and state e file S. Free federal and state e file non-exempt recipient (U. Free federal and state e file S. Free federal and state e file person subject to Form 1099 reporting), or a foreign person. Free federal and state e file For a foreign person, the statement must indicate whether the person is a beneficial owner or a foreign intermediary, flow-through entity, or a U. Free federal and state e file S. Free federal and state e file branch. Free federal and state e file The type of recipient the person is, based on the recipient codes used on Form 1042-S. Free federal and state e file Information allocating each payment, by income type, to each payee (including U. Free federal and state e file S. Free federal and state e file exempt and U. Free federal and state e file S. Free federal and state e file non-exempt recipients) for whom documentation has been provided. Free federal and state e file The rate of withholding that applies to each foreign person to whom a payment is allocated. Free federal and state e file A foreign payee's country of residence. Free federal and state e file If a reduced rate of withholding is claimed, the basis for a reduced rate of withholding (for example, portfolio interest, treaty benefit, etc. Free federal and state e file ). Free federal and state e file In the case of treaty benefits claimed by entities, whether the applicable limitation on benefits statement and the statement that the foreign person derives the income for which treaty benefits are claimed, have been made. Free federal and state e file The name, address, and TIN (if any) of any other NQI, flow-through entity, or U. Free federal and state e file S. Free federal and state e file branch from which the payee will directly receive a payment. Free federal and state e file Any other information a withholding agent requests to fulfill its reporting and withholding obligations. Free federal and state e file Alternative procedure. Free federal and state e file   Under this alternative procedure the NQI can give you the information that allocates each payment to each foreign and U. Free federal and state e file S. Free federal and state e file exempt recipient by January 31 following the calendar year of payment, rather than prior to the payment being made as otherwise required. Free federal and state e file To take advantage of this procedure, the NQI must: (a) inform you, on its withholding statement, that it is using the alternative procedure; and (b) obtain your consent. Free federal and state e file You must receive the withholding statement with all the required information (other than item 5) prior to making the payment. Free federal and state e file    This alternative procedure cannot be used for payments to U. Free federal and state e file S. Free federal and state e file non-exempt recipients. Free federal and state e file Therefore, an NQI must always provide you with allocation information for all U. Free federal and state e file S. Free federal and state e file non-exempt recipients prior to a payment being made. Free federal and state e file Pooled withholding information. Free federal and state e file   If an NQI uses the alternative procedure, it must provide you with withholding rate pool information, as opposed to individual allocation information, prior to the payment of a reportable amount. Free federal and state e file A withholding rate pool is a payment of a single type of income (as determined by the income categories on Form 1042-S) that is subject to a single rate of withholding. Free federal and state e file For example, an NQI that has foreign account holders receiving royalties and dividends, both subject to the 15% rate, will provide you with information for two withholding rate pools (one for royalties and one for dividends). Free federal and state e file The NQI must provide you with the payee specific allocation information (information allocating each payment to each payee) by January 31 following the calendar year of payment. Free federal and state e file Failure to provide allocation information. Free federal and state e file   If an NQI fails to provide you with the payee specific allocation information for a withholding rate pool by January 31, you must not apply the alternative procedure to any of the NQI's withholding rate pools from that date forward. Free federal and state e file You must treat the payees as undocumented and apply the presumption rules, discussed later in Presumption Rules . Free federal and state e file An NQI is deemed to have f
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How to Forward the Header of a Phishing Email

It is important that the original communication you received is included, as well as Internet headers. The following instructions will assist you in forwarding a phishing communication to us at phishing@irs.gov.

If you receive an email or find a website you think is claiming to be the IRS

  1. Do not reply.
  2. Do not open any attachments. Attachments may contain malicious code that will infect your computer.
  3. Do not click on any links. If you clicked on links in a suspicious email or phishing website and entered confidential information, visit our identity protection page.

    Report email claiming to be from the IRS or bogus IRS websites to us by using the following steps
  4. Forward the email or the URL of the website to the IRS at phishing@irs.gov.
  5. You can forward the email message as received or provide the Internet header of the e-mail. The Internet header has additional information to help us locate the sender.
  6. After you forward the email or header information to us, delete the message you received.

If the methods above do not work, at a minimum, please send the underlying link of the phishing website.

If the suspicious e-mail includes a file attachment, it is safer to simply highlight the message and forward it. Some configurations, especially in Windows environments, may allow the execution of arbitrary code upon opening and viewing a malicious email message.

The IRS can use the information, URLs and links in the suspicious e-mails you forward to trace the hosting website and alert authorities to help shut down the fraudulent sites.

Main phishing resource page:
How to Report and Identify Phishing, E-mail Scams and Bogus IRS Web sites

Page Last Reviewed or Updated: 06-Dec-2013

The Free Federal And State E File

Free federal and state e file Index A Accelerated cost recovery system (ACRS):, ACRS Defined Alternate method, Alternate ACRS Method (Modified Straight Line Method) Classes of recovery property, Classes of Recovery Property Deduction, short tax year, ACRS Deduction in Short Tax Year Defined, ACRS Defined Dispositions, Early dispositions of ACRS property other than 15-, 18-, or 19-year real property. Free federal and state e file Recovery periods, Recovery Periods Unadjusted basis, Unadjusted Basis B Basis: Adjusted, Adjusted basis. Free federal and state e file Unadjusted, ACRS, Unadjusted Basis C Changing methods, How To Change Methods D Declining balance method, Declining Balance Method Deduction: ACRS, How To Figure the Deduction How to figure, How To Figure the Deduction Dispositions, Dispositions, Dispositions I Income forecast method, Income Forecast Method L Listed property:, Listed Property Defined 5% owner, 5% owner. Free federal and state e file Computers, related equipment, Computers and Related Peripheral Equipment Defined, Listed Property Defined Entertainment use, Entertainment Use Leased, Leased Property Other transportation property, Other Property Used for Transportation Predominant use test, Predominant Use Test Qualified business use, Qualified Business Use Recordkeeping, What Records Must Be Kept, Adequate Records Related person, Related person. Free federal and state e file Reporting on Form 4562, Reporting Information on Form 4562 Use by employee, Employees M Methods of figuring depreciation:, Income Forecast Method ACRS, How To Figure the Deduction Declining Balance, Declining Balance Method Income forecast, Income Forecast Method Straight line, Straight Line Method P Passenger automobile: Defined, Passenger Automobile Defined Predominant use test, applying, Applying the Predominant Use Test Property: ACRS, What Can and Cannot Be Depreciated Under ACRS Intangible, Intangible property. Free federal and state e file R Recapture: Depreciation, Depreciation Recapture Excess depreciation, listed property, Recapture of excess depreciation. Free federal and state e file Recordkeeping: For listed property, What Records Must Be Kept S Salvage value, Salvage Value Straight line method, Straight Line Method U Useful life, Useful Life V Videocassettes, Videocassettes. Free federal and state e file Prev  Up     Home   More Online Publications