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Amounts Subject to NRA Withholding and Reporting

Amounts Subject to Chapter 3 Withholding:

  1. Fixed or determinable, annual or periodical (FDAP) income; or
  2. Certain gains from the disposition of timber, coal, and iron ore, or from the sale or exchange of patents, copyrights, and similar intangible property.

Amounts subject to Chapter 4 Withholding

Beginning on July 1, 2014, a withholding agent must withhold on a payment of U.S. source FDAP income that is a withholdable payment to which an exception does not apply under chapter 4.

Withholdable payment means:

  • A payment of U.S. source FDAP income, and
  • For sales or other dispositions occurring after December 31, 2016, gross proceeds from the sale or other disposition of property of a type that can produce interest or dividends or dividends that are U.S. source FDAP income.

U.S. source FDAP income means:

  • U.S. source FDAP income under chapter 3, as modified by chapter 4, and
  • Certain gains from the disposition of timber, coal, and iron ore, or from the sale or exchange of patents, copyrights, and similar intangible property.

For  details on the types of income that are subject to withholding and reporting, refer tothe “Income Subject to Withholding” section of Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities.

References/Related Topics

Note: This page contains one or more references to the Internal Revenue Code (IRC), Treasury Regulations, court cases, or other official tax guidance. References to these legal authorities are included for the convenience of those who would like to read the technical reference material. To access the applicable IRC sections, Treasury Regulations, or other official tax guidance, visit the Tax Code, Regulations, and Official Guidance page. To access any Tax Court case opinions issued after September 24, 1995, visit the Opinions Search page of the United States Tax Court.

Page Last Reviewed or Updated: 07-Oct-2016