Are you a seafarer or pilot who is employed by a foreign company and travels to the USA for work? and need to make a US tax refund claim?
If yes, and the employer was required to issue a Form W-2 for wage income where the work was performed in the USA, you may be able to reclaim the US tax held if there is a treaty with your home country exempting the income.
As part of the process you would wait until after the tax year has closed and then make a claim (e.g. you worked in 2024, you would then make a reclaim of tax in 2025).
Unfortunately, that means if you worked in January 2024, you cannot reclaim until January 2025 at the earliest.
Compensation for personal services paid to nonresident alien individuals who are temporarily present in the United States as regular crew members of a foreign vessel engaged in transportation between the United States and a foreign country, or a possession of the United States, shall not be subject to U.S. taxation.
The same applies where there is an exemption under treaty, if there is one with your country of tax residence (Tax treaty provisions are not automatic and must be elected by the taxpayer - i.e. you must file a tax return to claim the treaty provision).
How do I make a claim for a refund of overheld US tax?
You would both file a Form 1040NR and make a treaty claim as well as apply for an ITIN if you have no US tax number (either SSN or valid and unexpired ITIN*).
* an ITIN expires after 3 years of not filing a US tax return. E.g. if you didn't file in 2020, 2021 or 2022 and then tried to file in 2023, you would be required to renew, else the refund will be delayed).
I am a seafarer and am tax resident in Spain, can I reclaim the tax?
If you have received a W-2 from the complement of a foreign vessel and a foreign employer is listed on the W-2, then yes, under the US and Spain tax treaty, you can make a claim for a refund of US tax paid as long as you meet the following:
(a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any 12-month period;
(b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and
(c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.
Also, (notwithstanding the preceding provisions of the treaty article), remuneration derived in respect of an employment as a member of the regular complement of a ship or aircraft operated in international traffic by an enterprise of a Contracting State may be taxed in that State.
How long will my refund take once submitted?
If applying for an ITIN as well, it will take longer. The ITIN can take 2 to 4 months, depending on how busy the ITIN unit is. Then once assigned, the tax return is forwarded for processing and can take a few weeks up to several months for the refund to be issued to you.
Where you already have a valid ITIN or an SSN, it will take a few weeks to a few months, depending on when in tax season the return is submitted.
I applied for an ITIN already but it was rejected. Can Just Breve help?
Yes, Just Breve is a Certifying Acceptance Agent. We are able to assist with all types of ITIN applications.
In the case of a seafarer or pilot working for a foreign employer, you must attach the 1040NR US tax return. Without it, your application for the ITIN will reject.
As a Certifying Acceptance Agent, Just Breve would also check your identity documents and issue a certification (Form W-7COA – certificate of accuracy) which is attached to the application for the ITIN. This means your original identity documents stay with you and do not need to be sent to the IRS.
How can I start the process for a tax treaty reclaim as a seafarer or pilot?
It’s easy, just email or call Just Breve today for more information and how we can help - 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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