W8 versus W9
Moderator: Mark T Serbinski CA CPA
W8 versus W9
My daughter has recently moved to the US. Her husband has an H1b visa and she and their two kids are H4s.
She has encountered a fair amount of confusion from both Canadian and US financial institutions regarding her residency status. She is no longer resident in Canada but she will not qualify as a US alien resident until she meets the substantial presence test which will not occur until March of 2023.
So, while I assume she is already a resident of the US for tax purposes, she cannot complete and sign a W9 but neither does it seem correct to claim W8 status.
Has anyone else come up against this issue and any suggestions how it should properly be handled ?
Thanks very much for any help or comments.
She has encountered a fair amount of confusion from both Canadian and US financial institutions regarding her residency status. She is no longer resident in Canada but she will not qualify as a US alien resident until she meets the substantial presence test which will not occur until March of 2023.
So, while I assume she is already a resident of the US for tax purposes, she cannot complete and sign a W9 but neither does it seem correct to claim W8 status.
Has anyone else come up against this issue and any suggestions how it should properly be handled ?
Thanks very much for any help or comments.
Re: W8 versus W9
This applies to the whole family, btw, not just your daughter.
If she has an ITIN or SSN and is physically residing in US, she fills a W-9.
There is a reason W-8 is actually called W-8BEN: It is for claiming certain treaty rights for residents of another country. This doesn't apply to her.
If she has an ITIN or SSN and is physically residing in US, she fills a W-9.
There is a reason W-8 is actually called W-8BEN: It is for claiming certain treaty rights for residents of another country. This doesn't apply to her.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: W8 versus W9
Thanks Nelsona.
However, I am still a little confused by this.....
Item 3 of Part II, Certification of the W9 form certifies that the person signing the form is " a US citizen or other US person ".
The instructions below the form say that this means you are a US person or resident alien.
However, my daughter will not become a US resident alien until she meets the substantial presence test.
So, how can she sign the W9 form ? She would be saying that she is a resident alien when actually she isn't yet.
I'm sure we are missing something here....maybe the form simply isn't clear enough. I greatly appreciate your clarification and help.
However, I am still a little confused by this.....
Item 3 of Part II, Certification of the W9 form certifies that the person signing the form is " a US citizen or other US person ".
The instructions below the form say that this means you are a US person or resident alien.
However, my daughter will not become a US resident alien until she meets the substantial presence test.
So, how can she sign the W9 form ? She would be saying that she is a resident alien when actually she isn't yet.
I'm sure we are missing something here....maybe the form simply isn't clear enough. I greatly appreciate your clarification and help.
Re: W8 versus W9
nelsona re: There is a reason W-8 is actually called W-8BEN: It is for claiming certain treaty rights for residents of another country. This doesn't apply to her.
W-8BEN is sometimes used only to establish foreign identity and sometimes used to BOTH establish foreign identity and claim treaty benefit. It is NOT exclusively used for treaty benefit.
W-8BEN is sometimes used only to establish foreign identity and sometimes used to BOTH establish foreign identity and claim treaty benefit. It is NOT exclusively used for treaty benefit.
Re: W8 versus W9
goldstone - why would your scenario be any different than a Cdn tax resident visiting the USA and providing a requester with W-8BEN while in the USA, and that Cdn is considering moving to Florida within 36 months. There is a finite point in time when one's tax-resident country changes, or doubles-up.
Re: W8 versus W9
It all depends on WHO is doing the requesting.
If she is openinga bank account in US, and lives in US, and will be filing a joint tax return with spouse, and will meet all definitions of residdnt within weeks, she should file W-9.
If it is a Cdn bank requesting a W-9 to establish that she is a US person (for FATCA, and withholding purposes), she should file a W-9.
If she is living in Canada, and has a US account, THEN she files a W-8BEN.
If she is openinga bank account in US, and lives in US, and will be filing a joint tax return with spouse, and will meet all definitions of residdnt within weeks, she should file W-9.
If it is a Cdn bank requesting a W-9 to establish that she is a US person (for FATCA, and withholding purposes), she should file a W-9.
If she is living in Canada, and has a US account, THEN she files a W-8BEN.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: W8 versus W9
The W- form is going in her permanent file. It is a way of assigning her tax ID to her file. Is she going to send a W-9 three months from now?
A W8 will subject her to unnecessary withholding, say, say from an investment account.
Don't over think this.
A W8 will subject her to unnecessary withholding, say, say from an investment account.
Don't over think this.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: W8 versus W9
The IRS website seems to me quite clear that goldstone's daughter is a US person. Wondering why goldstone thinks SPT is the only criterion.
https://www.irs.gov/individuals/interna ... x-purposes
and then if you follow the link on "resident" in the first section:
https://www.irs.gov/individuals/interna ... ncy-status
Note here the exceptions. A couple of these seem applicable.
ND asked "why would your scenario be any different than a Cdn tax resident visiting the USA". I think there's a huge difference. She's in the country on an H4. This is not the same as visiting as a tourist. They've made the move, she should make like a US person.
https://www.irs.gov/individuals/interna ... x-purposes
and then if you follow the link on "resident" in the first section:
https://www.irs.gov/individuals/interna ... ncy-status
Note here the exceptions. A couple of these seem applicable.
ND asked "why would your scenario be any different than a Cdn tax resident visiting the USA". I think there's a huge difference. She's in the country on an H4. This is not the same as visiting as a tourist. They've made the move, she should make like a US person.
Re: W8 versus W9
Nelsona.....well this all started when she submitted a W9 to a US bank where she had opened an account. They rejected it because of the issues we are discussing.
Maggie.....thanks very much for these helpful links. But......unless I'm reading them incorrectly I think they confirm that she is not yet a US person. When you follow the link for ' resident ', it says that you are only resident if you pass either the green card or the substantial presence test. And she doesn't pass either of those. Am I missing something...?
Maggie.....thanks very much for these helpful links. But......unless I'm reading them incorrectly I think they confirm that she is not yet a US person. When you follow the link for ' resident ', it says that you are only resident if you pass either the green card or the substantial presence test. And she doesn't pass either of those. Am I missing something...?
Re: W8 versus W9
They rejected it because she said too much. They did not need to know when she arrived and how long it would take to meet SPT etc.
They wanted her ITIN on file. Period.
They wanted her ITIN on file. Period.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: W8 versus W9
But if it is really bothering her (you), then have her file a W-8BEN, and in march file a W-9.
Why are we having this discussion?
.. and why isn't SHE having this discussion.
Why are we having this discussion?
.. and why isn't SHE having this discussion.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: W8 versus W9
But don't ignore Maggie's point, and mine, that she will no doubt file jointly as a resident in 2022, by virtue of one of the treaty provisions or IRS "elections which override the green card test and the substantial presence test". This is something no bank can decide for her.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: W8 versus W9
Thanks everyone. Just to probably close off this discussion, to respond to your last three posts Nelsona.....
1. Perhaps a pragmatic approach would have slid by the issue. But when you are new in a country where the tax authorities have a reputation for being a bit tough to deal with I can totally understand ( and would have encouraged ) her decision not to sign a document which she had found out was incorrect.
2. We are having this discussion because, a) She and I have a pure curiosity about what the correct situation is here. b) It would appear that neither a W8 nor W9 applies in her case so she is in a limbo which one would expect has come up before and been addressed by authorities. c) I believe she has sorted things out with the US bank but her accounts with her Canadian bank have now been frozen so she has to get that addressed. For the most part this has meant educating folks at the bank who really just want to tick a box.
She is pursuing all this appropriately with FIs in the US and Canada. She isn't having this discussion on here because she is unaware that this forum even exists. But I am a loving father who is interested in the debate and am trying to see if I can help her so she can focus on helping her family integrate into a new country !
3. Yes, thanks to you and Maggie for this important point. We are aware that it will most likely be advantageous for her and her husband to file jointly for 2022.
Thanks again for for the help and advice which you provide on this forum. It is very much appreciated.
1. Perhaps a pragmatic approach would have slid by the issue. But when you are new in a country where the tax authorities have a reputation for being a bit tough to deal with I can totally understand ( and would have encouraged ) her decision not to sign a document which she had found out was incorrect.
2. We are having this discussion because, a) She and I have a pure curiosity about what the correct situation is here. b) It would appear that neither a W8 nor W9 applies in her case so she is in a limbo which one would expect has come up before and been addressed by authorities. c) I believe she has sorted things out with the US bank but her accounts with her Canadian bank have now been frozen so she has to get that addressed. For the most part this has meant educating folks at the bank who really just want to tick a box.
She is pursuing all this appropriately with FIs in the US and Canada. She isn't having this discussion on here because she is unaware that this forum even exists. But I am a loving father who is interested in the debate and am trying to see if I can help her so she can focus on helping her family integrate into a new country !
3. Yes, thanks to you and Maggie for this important point. We are aware that it will most likely be advantageous for her and her husband to file jointly for 2022.
Thanks again for for the help and advice which you provide on this forum. It is very much appreciated.