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Interest Bearing Account for Foreign w/o SS#

Answered by: 

Question: 
Can a foreign person without a Social Security Number have an interest bearing account? How would you report the interest earned?
Answer: 

Yes. As long as you have a current W8-BEN on file for each owner on the account, the account is not subject to information reporting; i.e. you can suppress the 1099-INTs.When the W-8 expires (see instructions), you must begin information reporting. Since you do not have a U.S. TIN, you must impose backup withholding.Note: Since this Guru Answer was published, IRS rules have changed. Beginning with interest earned in 2013, reporting of interest paid to non-residents of the U.S. will be required using IRS form 1042-S. The instructions for 2013 interest reporting using that form indicate that reporting will be required for persons with permanent residence addresses in specifically-designated countries, and the reports will be filed with the IRS (reports on interest paid to residents of non-designated countries will be optional). The form is currently used only for reporting interest paid to residents of Canada.

First published on BankersOnline.com 12/5/11; updated 12/24/12

First published on 12/24/2012

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