Quiz
A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
W
W-8BEN

Used for nonresident foreign individuals or entities, this form is required by the IRS to tell the payer, transfer agent, broker, or other middleman that an employee is a nonresident alien or foreign entity not subject to US tax-reporting or backup withholding. The failure to complete this form can result in automatic withholding of 28% on any proceeds from shares sold in a brokerage account. The completion of this form is usually part of the process of activating your brokerage account.

Form W-8BEN expires at the end of the third calendar year after its completion. When the form expires, you must complete a new form to continue the exemption from backup withholding.

You recover backup withholding by filing a tax return. Nonresident aliens can file a US tax return if they obtain a tax identification number by completing IRS Form W-7, which must be submitted with the tax return. If backup withholding is the only reason for the filing, you complete and submit Form 1040NR-EZ as your tax return.

For an example, including sample IRS forms, that shows how a non-US resident reclaims backup withholding, see a related FAQ elsewhere on this website.

Return to list Register Now

Try the new myStockOptions.com Glossary App! Now available for Android and iOS.

Get it on Google Play
The content is provided as an educational resource.
myStockOptions.com shall not be liable for any errors or delays in the content, or any actions taken in reliance thereon.
Copyright © 2000-2018 myStockPlan.com, Inc. U.S. Patent 7,353,200.
Contact editors@mystockoptions.com for licensing information