The W-8 forms are notoriously tricky for nonresidents to complete.
However, it’s important to have a good understanding of these documents – especially if you intend to earn income while in the US.
What is a W-8 form and what is it used for?
The W-8 forms are IRS forms used to collect nonresident taxpayer information and for nonresidents to avail of tax treaties.
Due to the fact that the typical rate of nonresident tax is 30%, the W-8 forms can be a useful way of reducing your tax payments if your home country has a tax treaty with the US.
Essentially, if you fail to complete a W-8 form, you can expect to be taxed at a rate of 30%, even if your home country has a tax treaty with the US!
Who needs to complete W-8 forms?
Nonresident aliens who have worked in the US, or have received income from US sources, should complete W-8 forms.
The same goes for foreign businesses in the US.
There are five W-8 forms: W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, and W-8IMY.
You can complete forms W-8BEN and W-8BEN-E online with Sprintax Forms
Countries which have tax treaties with the US
The US has more than 65 open tax treaties with countries around the world.
Whether you’ll be able to claim a tax treaty benefit will depend on a number of factors, including:
- The visa you’re on
- Type of income you received
- What you are being compensated for
- The type of organization that is paying you
You can find out more about tax treaties here.
When and where to submit W-8 forms
Technically, you do not file W-8 forms with the IRS.
Form W-8BEN will be sent by the organization that is making payments to you.
It should then be returned to the company that sent it to you, not the IRS. You won’t need to file it with a tax return.
What is the difference between W-8 and W9 forms?
There is a very simple answer when you are considering whether you should file W9 or W-8BEN.
The W-8 forms are for nonresidents only. That means international students also need to file a W-8BEN where necessary.
The W-9 forms are for residents of the US.
Unsure if you are a resident for tax purposes? You should take the Substantial Presence Test to find out.
Who can help me with my tax affairs?
Sprintax Forms can help you!
We can offer you:
- Online generation of forms, such as W-8BEN, W-8BEN-E, W4, 8823, and more!
- We’ll easily determine your tax residency status thus ensure you are paying the right amount of tax
- Our software will apply every tax treaty benefit you’re due
Our service was created in order to make tax prep easy and ensure our users are fully compliant with the IRS tax rules.
