W-8 forms are IRS forms used by foreign individuals or businesses to reduce or exempt their tax withholdings on income from U.S. sources. Different forms are required for various circumstances, such as whether it’s an individual or business earning the income, and the type of income earned. Failure to submit the form may result in the full 30% tax rate being imposed.
What is Form W-8BEN?
The W-8 form series are IRS forms used by foreign individuals and entities who receive income from sources in the U.S. Both individuals and businesses must submit a W-8 form to the payer or withholding agent accompanying the income. Form W-8BEN is used by foreign individuals who receive nonbusiness income, while form W-8BEN-E is used by foreign entities. Additional forms are used for income such as effectively connected income (W-8ECI), income from foreign governments or foundations (W-8EXP), and income received through intermediaries (W-8IMY). All forms must be submitted prior to receiving income, and failure to submit the form may result in a withholding of up to 30% of the income. The forms should be provided by the company making the payments and should not be sent to the IRS.
IRS Form W-8BEN – Who Needs to Fill It Out?
W-8 forms are Internal Revenue Service (IRS) forms that foreign individuals and businesses must file to verify their country of residence for tax purposes, certify they qualify for a lower rate of tax withholding and, ultimately, help them claim an exemption from certain withholdings. Required to be filed by non-U.S. individuals, foreign-domiciled businesses, and non-resident aliens, the forms will collect information on who the filer is, where they’re from, and the types of income earned. They must be submitted to the payer or withholding agent, not the IRS, and failure to do so can result in the full 30% rate being paid. Determining which form to use comes down to whether the filer is an individual or an entity, the type of income earned, and if they qualify for any special tax treatment. Forms are valid for the year they are signed and three full calendar years after that. Professional help is often sought to complete the forms.
Step-by-Step: Form W-8BEN Instructions For Filling Out the Document
W-8 forms are used by foreign individuals or entities to certify their country of residence for tax purposes, and apply for reduced rates of withholding. These five forms all require similar basic information (name, address, TINs), but which one needs to be used varies depending on whether the filer is an individual or an entity, the type of income received, and certain special tax treatment qualifications. Additionally, those completing the forms need to submit them to the payer or withholding agent (not the IRS) prior to receiving income or credits, and they are valid for the year in which they are signed and three full calendar years after.
Below, we present a table that will help you understand how to fill out Form W-8BEN.
| Information Required for W-8 Forms | Details |
|---|---|
| Name | Full name of the individual or entity |
| Address | Current mailing address |
| TINs (Taxpayer Identification Numbers) | Unique identification numbers for tax purposes |
| Type of Income | The type of income received (varies) |
| Special Tax Treatment Qualifications | Qualifications for special tax treatment, if applicable |
| Submission Process | Forms must be submitted to the payer or withholding agent |
| Validity | Forms are valid for the signing year and three full calendar years after |
Do You Need to File Form W-8BEN Each Year?
Do You Need to File W-8 Forms Each Year? Foreign individuals and businesses must file W-8 forms every year to verify their country of residence for tax purposes. Different forms must be used depending on the taxpayer’s situation; for instance, individuals use Form W-8BEN, while foreign entities use Form W-8BEN-E. Any of the five W-8 forms must be submitted to the payer or withholding agent prior to receiving payments, or else the foreign taxpayer may be subject to the full 30% rate of withholding on income made in the U.S. Furthermore, these forms are valid for the year in which they are signed and three years following.
Download the official IRS Form W-8BEN PDF
On the official IRS website, you will find a link to download Form W-8BEN. However, to make it easier for you, we are providing the link in our article, which comes directly from the official irs.gov website! Click to download: Form W-8BEN
Sources:
https://www.irs.gov/forms-pubs/about-form-w-8-ben
https://www.irs.gov/instructions/iw8ben
