If you have overpaid US tax (normally at 30% for non residents of the USA), you can normally reclaim this (either in part or in full from the IRS) if you file a US tax return.
Q1 - what is the process of applying for a refund?
A1 - normally the process involves filing a 1040NR US tax return (and any applicable schedules) with the IRS. The return must also show your US tax identification number (SSN or ITIN). If none is shown, they will issue a temporary number (called an IRSN) and log the return ONLY. They will then write asking for your ITIN (if you are a non resident and not eligible for an SSN). Any tax withholding documents must be attached to the tax return submission, else no refund will be issued.
Q2 - I don't have an SSN or ITIN - can I apply for that first?
A2 - normally the answer is no. Especially if it is just a one time filing of a US tax return to reclaim overpaid tax. In some instances however, you may be eligible for an exception to filing a US return (like selling a US property). In this instance, you may wish to apply for the number first and then file the US tax return to reclaim tax. Just Breve would normally advise what is best from a IRS processing perspective.
Q3 - How long does it take to get an ITIN?
A3 - ITINs take 3 to 4 months to be assigned once submitted.
Q4 - How long after receiving the ITIN, does the refund of tax take?
A4 - if the return was attached to the ITIN application, the return is forwarded for processing after the 3 to 4 months. It will then be processed in due course by the IRS. Current times for processing (in 2023) are around 6 to 12 months. It all depends on how busy the IRS are or if they also have further questions on the return (this happens sometimes), or if a 1042-S was attached (with no ITIN), as the IRS gives themselves 6 months to locate the tax held in their suspense accounts.
Q5 - I live in a tax treaty country - can I reclaim US tax?
A5 - It depends on what the treaty states and what was held. If the correct tax rate per the treaty was held, then there is no claim to be made and the correct tax was held. If it was overheld, then yes of course, you can reclaim it by filing a 1040NR.
Q6 - I don't live in a treaty country - can I reclaim US tax?
A6 - In most cases no. As non residents in a country with no treaty with the US, will be taxed on certain income types at a flat 30%, unless a treaty overrides it. In some instances (especially performance of services), yes you can reclaim some or all of the tax. Also where FIRPTA tax on the sale of a US property was held at 15% of the gross sale, you will be able to file and declare the tax on the net gain and reclaim the difference.
Q7 - Can Just Breve assist with my US tax reclaim and ITIN application?
A7 - Yes, Just Breve is both an Enrolled Agent (for US tax returns) and a Certifying Acceptance Agent for ITINs (known as a CAA). We regularly assist clients with both items together. If you have a self prepared tax return or another accountant has prepared this for you, we can still assist with the ITIN application. Any issues with the tax return (being self prepared or prepared by someone else) is solely your responsibility after the ITIN is assigned. Any tax return attached, is forwarded automatically by the ITIN unit for processing (internally). We would only assist with tax return related issues where Just Breve had prepared them.
Contact Just Breve for more information:
Just Breve - is a US tax accounting firm, assisting non US persons with their US tax filing requirements, including obtaining a refund of overpaid US tax. This includes applying for a new ITIN or renewing an existing ITIN. We are a certifying acceptance agent (CAA) and have a contract with the IRS to help with Form W-7 ITIN applications.
T: 0208 1444632
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