Trilo

I was wondering if anyone could shed a little light on this for me? I'm new to all this so was wondering if anyone has had a similar experience and any help or advice would be great.

I opened a bank account on the 10th December 2018 and I recently had a letter from them asking...

"Please provide evidence you are a citizen or national of a foreign country to avoid U.S. tax withholding." ... adding that they will "continue to apply U.S. tax withholding at a rate of 28% to all interest credited on your account(s)" until they receive the required information.

...and they have attached the Form W-8BEN with it to be filled out. Also on said form how would I fill line 10? It asks for "The beneficial owner is claiming the provisions of Article ____ of the treaty identified on line 9 above to claim a ____ % rate of withholding on (specify type of income): ____." Can I just leave this blank?

The bank has also asked me too... "Please provide the following: A copy of a government-issued document, such as a passport, showing you're a citizen or national of a country other than the U.S, and, showing a permanent address outside of the U.S."

... This is all very well but I do not have a permanent address outside of the U.S., although I did put my U.K. bank details at my parents address, I'm guessing this is something they could be referring to as a permanent U.K. address even if I don't reside there?

At the moment I am still going through the AOS process on a K1 Visa so I am not officially a Permanent U.S. Resident at this time (No Green Card yet, although I do have my SSN all sorted out at least).

Thanks in advance

Hotscot

Can you clarify...

Are you living and working in the US?
You have a SSN. Do you have US income?
The W8 BEN may not apply to you.

If you make enough interest to be dangerous, $10.00 for the year, the bank will issue a 1099-INT informing you of this, then you'll report it when you do your taxes.

Trilo

I have only been in the U.S. for 97 days on a K1 Visa and my AOS is still ongoing, so as of yet I cannot work as I do not have a Green Card or Work Permit, so no, I do not have a U.S. income, but I am living here with my USC wife. My U.S. bank account has under $300 in it at the moment but this will change once I transfer my U.K. funds across, which will be no higher than $8000 once the conversion rate has been took into account.

Hotscot

Ok, it seems you won't have earned any reportable interest for tax year 2018, that needs reporting in the tax return due by April 15th 2019.
You could probably ignore the form, unless they're specifically waiting for it.
If you wish you could inform the bank that you are now a US person for tax purposes, and then the bank won't get involved in withholding and no W8-BEN will be required.
Any reportable interest you make in 2019, you'll get a 1099-INT issued and it will be your obligation to report it. (Married filing jointly is usually the better choice at tax time.)

Either way it shouldn't be a big issue.

Welcome!

Cook_County

Sounds like you will be a US person for 2018 and will need to provide a W-9.

Owen778

US permanent residency (immigration) and US tax residency are two entirely separate things. There's often confusion about this. It sounds like you're already a US tax resident, so I would supply them with a W9, stating your SSN, instead of a W8-BEN.

Hotscot

https://www.irs.gov/pub/irs-pdf/fw9.pdf

Here's the form...just give the bank a call and see if they need it. (They may not.)

If you need input on filling it in just come back with questions.

petitefrancaise

I was asking the banker about this today
this form is issued to "non-resident aliens" if they have an account which is interest paying. It means the bank don't have to withhold tax on the interest paid and saves you having to potentially try to get money back from the IRS.
Your parents address would be fine, they just need an address and your NI number from the UK is your "tax identifier".
Although you haven't been paid much interest, the bank will want this on file for you and it should be updated anytime your personal details change (address etc). Once you are a resident, they won't need it again.

Cook_County

I concur. THIS reply is 100% correct.

Trilo

The W-8BEN does ask for a SSN or ITIN number. I contacted the helpline to the bank again and they said to just send the form back with the sections I can fill out with a letter attached, they were not sure on what I needed to put on Part II of the form either, lol They tried to put me through to the IRS but due to the govt. shutdown no ones there to answer the phone apart from a computer.

Hotscot

Box ticking ...

theOAP

The IRS has recently issued a notice to banks stating the banks should forward what information they have even if there is no SSN or TIN for the account holder for accounts held offshore by US Persons. As for US accounts held by US tax residents, the procedure is standard. For offshore accounts, the bank will be required to make a yearly inquiry asking if a number is now available.

If you are a US Person, and as mentioned above, the proper form to file is a W9. US Persons are not allowed to file a W8-BEN, unless they have decided to take the personal risk and lie to their bank about their status. Having US income is not a factor for either a W9 or W8, only residency for tax purposes. If discovered, such actions could result in the closure of all accounts with that bank.

Concerning accounts held outside the US (it's not totally clear whether it's your US account or UK? account, but I'm assuming it's the US account), a court case in Canada will continue next week, protesting against the release of account information by the CRA (Canadian HMRC/IRS) due to the IGA. No matter what the outcome, the case will probably reach the Canadian Supreme Court. A recent disclosure by the CRA, a result of an FOI request, indicates details of 1.6 million accounts have been forwarded to the IRS from Canada since 2014. HMRC have not been as accommodating on releasing similar figures in the UK.

As noted above by several people, US Person does not mean solely a US citizen. US Person also includes anyone subject to US tax obligations (real or potential).