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Non-citizen & Citizen Co-owned Account
by Randy Carey, BOL Guru
Guru Bio
Question: I have a client who wants to open an interest bearing checking account with a relative who is a Russian citizen. If the non-citizen is the primary owner on the account and the U.S. citizen is a co-owner will the U.S. citizen be liable for any taxes on the interest? I told the customer only the primary owner is liable for taxes and since he or she is not a U.S. citizen, he or she would not be liable for taxes as long as we have a W-8 form signed. Am I right?
Answer: If you have a joint account with both a U.S. Person and an Non-resident Alien, you should obtain a W-9 from the U.S. person and report payments accordingly. An unexpired W-8BEN is not required, as a W-9 never expires.
From the W-8BEN intructions:
"If you own the income or account jointly with one or more other persons, the income or account will be treated by the withholding agent as owned by a foreign person if Forms W-8BEN are provided by all of the owners. If the withholding agent receives a Form W-9 from any of the joint owners, the payment must be treated as made to a U.S. person."
First published on BankersOnline.com 2/04/08
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