W-8BEN quick questions

[crossbordernut]

Canadian citizen and resident will be taking distributions from a pre-tax 403b plan that she inherited from her deceased husband. She needs to fill out a W8-BEN to claim the 15% treaty withholding instead of the usual 30% on distributions.

--They've told her that she needs to apply for an ITIN first via W-7 to input on line 5 of the W-8BEN in order to get the 15% treaty rate. Is that true, i.e. Canadian SIN on line 6 isn't enough to get the 15% treaty rate applied via W-BEN? (Let's assume this would be only her only US source income so no need for her to file a 1040NR, but is plan administrator correct on insisting ITIN be obtained regardless to apply treaty rate?).

--Am I correct that Line 10 is supposed to be left blank in this situation, ie not supposed to write Article XVIII and 15% since it's not a "special rate"?

--She also inherited an after-tax annuity. For Canadian tax purposes if she takes it over, is it all non-taxable going forward or (as I suspect) is the portion of the distributions that would be taxable in the US (any earnings portion I assume) also taxable in the same way in Canada?

Thanks for the help!

[nelsona]

The instructions are pretty clear that she doesn't need an ITIN for the type of income she is receiving.

Line 10 has to be filled. this is the whole point of her filing this W8-BEN: to BENEFIT from the reduced taxrate of 15% rather than 30%. Otherwise the only reason to file this would be for identification purposes, like for a bank.

Annuity income from US is taxable in Canada to the same extent that it is in US.

[nelsona]

You could proaobly skip 10 in normal cases, but you want to spell out the 15% here because the firm doesn't seem to have a grasp of what she is entitled to.

[crossbordernut]

Thanks so much nelsona!