Tax & Accounting Blog

IRS Issues New 2013 Edition of Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities

1042-S, 1099, Blog, International Reporting & Compliance, ONESOURCE, Tax Information Reporting March 6, 2013

The IRS has issued a new edition of Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, revised for use in 2013.

Pub 515 is the basic plain-English IRS explanation of payers’ tax withholding obligations under Chapter 3 of the Internal Revenue Code (section 1441 withholding) for payments of U.S-source income to non-U.S. persons.

Also covered are rules for sourcing of income either within or outside of the United States, documentation of beneficial owners of income, the deposit and reporting of withheld tax, and Form 1042-S tax reporting. Tax treaty tables at the back of Pub 515 show reduced withholding rates which may be used under tax treaty terms when the required supporting certification is furnished by the payee.

The 2013 edition of Pub 515 includes a reminder of the new requirement to report deposit interest of $10 and more paid on and after January 1, 2013, to nonresident alien individuals who are residents of countries listed in Rev. Proc. 2012-24. For this reporting requirement, deposit interest includes certain interest paid by insurance companies, but does not include interest paid on margin by brokerage firms. Publication 515 is available on the IRS web site at http://www.irs.gov/pub/irs-pdf/p515.pdf.