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IRS Tax Refund USA


IRS Tax Refund USA

Non resident aliens (NRAs) can claim back tax for varying reasons from the USA. One of the primary reasons is when a tax treaty article overrides the US domestic law to allow the foreign person to claim back up to 30% of tax withheld from certain types of US income.

Examples of income where tax can be reduced significantly include:

- US casino gambling winnings where 30% tax withholding is withheld due to the foreign person not having an ITIN. An ITIN is a tax identification number (TIN) for individuals. As part of the process for the reclaim where gambling winnings have occurred, a US tax return called a 1040NR, will need to be filed simultaneously with the ITIN application (Form W-7). Form 8833 for a Treaty based position also needs to be filed to state that a treaty article is being used to reduce/eliminate the US tax being held. Therefore, resulting in a refund of that tax. As part of the overall tax return filing, proof of the withholding will also need to be added. This is normally the 1042-S copy that is issued to the foreign person by the casino, showing the gross income and tax withheld.

- US dividends paid by a US corporation are taxed at 30% for foreign persons. Where a tax treaty article exists, this can be reduced. For example for the United Kingdom dividends are taxed at a reduced withholding of 15% instead of 30%. Where a foreign person has had too much tax withheld, they can claim back the difference by filing a 1040NR tax return along with an 8833 Treaty claim. As well as attaching proof of the over withheld tax (normally a 1099 issued by the broker/US company). Going forward a W-8BEN should be completed and provided to the US company to stop future tax being withheld at the higher rate.

- US pensions and annuities are taxed at 30% for foreign persons. Where a tax treaty article exists the tax withholding can be reduced to nil where the taxpayer resides in another country (e.g. United Kingdom). A US 1040NR will need to filed along with an 8833 Treaty claim. As well as attaching proof of the over withheld tax (normally a 1099 issued by the US pension company). Going forward a W-8BEN should be completed and provided to the US company to stop future tax being withheld.

- US royalty income is taxed at 30% for foreign persons. Where a tax treaty article exists the tax withholding can be reduced to nil where the taxpayer resides in another country (e.g. United Kingdom). A US 1040NR will need to filed along with an 8833 Treaty claim. As well as attaching proof of the over withheld tax (normally a 1099 issued by the US company paying the US royalties). Going forward a W-8BEN should be completed and provided to the US company to stop future tax being withheld.

- Self employed income is taxed at 30% for foreign persons. Where a tax treaty article exists the tax withholding can be reduced to nil where the taxpayer resides in another country (e.g. United Kingdom). A US 1040NR will need to filed along with an 8833 Treaty claim. As well as attaching proof of the over withheld tax (normally a 1042-S issued by the US company paying the US wage income). Going forward a Form 8233 (Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual) should be completed and provided to the US company to stop future tax being withheld.

In all instances above, an ITIN will be need to be obtained to file the US 1040NR tax return. All ITINs are valid ongoing unless there is a break in tax returns being filed of 3 consecutive years. ITINs are also still valid for reporting purposes indefinitely, but when a tax return is later required to be filed, after a 3 year break in filing, the ITIN will need to be renewed.

Foreign individuals need to ensure any foreign income earned is reported in their country of residence and taxed accordingly.

How can we assist you?

Just Breve are Enrolled Agents and Certifying Acceptance Agents (CAA) - able to assist alien individuals and other foreign persons with obtaining EINs and ITINs from the IRS by assisting in completing forms and validating the person’s foreign status and identity (as applicable).

We are based near London Heathrow and can assist individuals to obtain their EIN or ITIN number at their convenience. Are you flying in or out of Heathrow on business? We can meet you to verify all ITIN documentation near the Heathrow area or at a location that suits you. We have met clients at their homes, offices, local coffee shops and even service stations. Wherever it is convenient for them, we will try to accommodate the request.

We cover London and the surrounding areas, Heathrow and anywhere in the UK and Europe. Travel costs apply in certain cases outside of London. Email or call for assistance today.

Get in touch today:

e: info@justbreve.com

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CERTIFIED ACCEPTANCE AGENTS

In lieu of sending original documentation, taxpayers may be eligible to use an IRS authorized Certified Acceptance Agent (CAA).

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