Tax & Accounting Blog

IRS Releases Drafts of New Forms W-8BEN

IRS Releases Drafts of New Forms W-8BEN

On May 31, 2012, the IRS released drafts of new Forms W-8BEN. A foreign person uses Form W-8 to certify their withholding status and eligibility for treaty benefits. The IRS updated the form to reflect changes required by the Foreign Account Tax Compliance Act (FATCA). There are two separate draft forms. Form W-8BEN is for foreign individuals. Form … Read More

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 4: Do the Same Tax Residency Rules Apply for State Withholding Tax Purposes?

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 4: Do the Same Tax Residency Rules Apply for State Withholding Tax Purposes?

No, unless the state has specific rules defining residency that are tied to a recipient’s federal tax residency status. Lacking such special rules, residency for state tax purposes is determined for foreign nationals under the same rules that apply to U.S. citizens. … Read More

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 2: How Do I Know if My Organization Is a Withholding Agent?

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 2: How Do I Know if My Organization Is a Withholding Agent?

The IRS defines withholding agent very broadly. Every U.S. or foreign person who controls, holds custody of, receives, disposes of, or pays any item of income to a foreign person that is subject to NRA withholding is a withholding agent. A withholding agent includes (without limitation) individuals, corporations, partnerships, trusts, associations or any other entity … Read More

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 1

NRA Withholding and Reporting on Payments to Foreign Nationals – Part 1

The federal withholding and reporting rules for payments for personal services made to foreign nationals depend on the recipient’s federal tax residency status – resident alien or nonresident alien. Compensation payments to resident aliens are subject to the same rules for withholding and reporting as are such payments to U.S.citizens. These payments are not subject … Read More

Items to Consider In Nonresident Alien Payroll Processing

Items to Consider In Nonresident Alien Payroll Processing

Are all of your employees either U.S. citizens or U.S. lawful permanent residents? Form I-9, Work Authorization Verification, indicates a choice of four categories for employees: U.S. citizen U.S. national U.S. lawful permanent resident A nonimmigrant authorized to work through [a specified date] If no, do you capture immigration status history and U.S. presence … Read More

Kentucky Offers Tax Amnesty, Cutting Interest in Half and Waiving Penalties

Kentucky Offers Tax Amnesty, Cutting Interest in Half and Waiving Penalties

The new Kentucky Tax Amnesty Act authorizes a tax amnesty program, which will be run by the state Department of Revenue for a period of no less than 60 days and no more than 120 days beginning on a date yet to be set in the fiscal year July 1, 2012 to June 30, 2013. … Read More