Central Withholding Agreements

 

The mission of the central withholding agreement (CWA) program is to provide assistance to non-resident alien athletes and entertainers (NRAAE) performing independent personal services in the U.S. so that they understand and meet their U.S. tax obligations. In doing so, the program will ensure that: all NRAAEs are treated fairly and consistently; tax laws are applied correctly; and alternative treatments (non-audit procedures) will be used efficiently.

Central Withholding Agreement

A CWA is an agreement entered into by the NRAAE, a designated withholding agent (DWA) and an authorized representative of the IRS. The agreement is for a specific tour or series of events and withholding is based upon the budget provided and net profits estimated. The CWA is not effective unless all parties have signed the agreement. The NRA must be in compliance for all required Federal Income tax returns, payment obligations, and withholding for non-CWA events. The agreement includes the NRAAE will timely file Form 1040-NR, U.S. Non-Resident Alien Income Tax Return, or Form 1040-NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents, for the year in which the CWA independent personal services are performed.  If the tour covers a period that spans additional calendar years, more than one CWA may be required.

Generally, if you are a nonresident alien entertainer or athlete performing independent personal services or participating in athletic events in the United States, you are subject to 30 percent withholding of gross income. You may be able to enter into a withholding agreement with the IRS for reduced withholding provided certain requirements are met. Under no circumstances will such a withholding agreement reduce taxes withheld to less than the anticipated amount of income tax liability.

The IRS has received questions about CWAs from taxpayers and stakeholders during phone forums and other outreach events. The answers to these questions provide responses to general inquiries and are not citable as any type of legal authority. Refer to FAQs About Central Withholding Agreements.
For additional information or questions about the CWA program, you may contact us via email at CWA Program.

Note: Please do not provide any personal information such as Taxpayer Identification Number, Social Security Number, or address. For security reasons we cannot answer questions about your account over the Internet.

Simplified CWA – Form 13930-A

Form 13930-A, Application for Central Withholding Agreement (under $10,000) will allow individual NRAAEs with gross income of less than $10,000 to apply for a CWA.

Note: Form 13930-A is an expansive document. The form expands according to the number of applicants entered in Section 1 (Group Information), Box b, generating additional information sections and Simplified CWA Declaration pages for each applicant.   Section 2 (Itinerary) also expands to allow for the insertion of additional events. 

Basic Requirements:

  1. Gross Tour Income of less than $10,000.
  2. Complete Application Form 13930-A must be received by the IRS at least 45 days prior to the first event to be covered under a Simplified CWA.
  3. Meet all tax return filing/posting requirements.
  4. Applicant must have satisfied payment obligations for all years or be under an approved payment arrangement with the IRS.
  5. Form 13930-A along with required withholding payment must be submitted through Pay.gov by the Designated Withholding Agent (DWA).
  6. The DWA must have a US bank account and US Employer Identification Number (EIN).

Designated Withholding Agents must establish a Pay.gov account.  For more information about Pay.gov and how to establish an account visit Pay.gov.

All Form 13930-A CWA applications must be submitted through Pay.gov.

Form 13930 - CWA

Form 13930, Instructions on How to Apply for a Central Withholding Agreement, allows individual NRAAEs with calendar year-to-date U.S. gross income of at least $10,000 to apply for a withholding agreement. To determine whether the gross income threshold is met, the IRS will aggregate gross income from prior CWAs in the same calendar year, the estimated gross income on the CWA application, settlement amounts not covered by a CWA for which there has been withholding at the proper rate.

All Form 13930 CWA applications must be mailed to the following address, or faxed to 866-715-1507.

Central Withholding Agreement Program
Mail Stop: 1441
2001 Butterfield Road
Downers Grove, IL 60515-1050

Requests for a CWA must be received by the IRS at least 45 days prior to the first event to be covered by the CWA.  Requests received with less than 45 days prior to the first event to be covered by the CWA will not be processed and such event(s) will be subject to withholding at 30% of the gross income as is required by IRC 1441.

As part of the application process, NRAAEs requesting a CWA must have filed and paid or made arrangements to pay all previous U.S. taxes as appropriate. 

The NRAAE must submit the information contained in Form 13930, Instructions on How to Apply for a Central Withholding Agreement PDF, which includes the following:

  1. Application Form 13930 or other written documentation to include at least:
    1. Name of the NRAAE to be covered by the central withholding agreement
    2. SSN or ITIN of the NRAAE, if known
    3. Tour event or event to be covered
  2. Penalty of perjury statement signed by either a valid Form 2848 holder or by the NRAAE.
  3. Form 2848 or Form 8821 unless the NRAAE is representing himself (if POA is on file for the dates requested, no new POA is needed but statement should be included in application).
  4. Preliminary Itinerary for the events to be covered by the CWA.
  5. Preliminary budget for income and expense for the events to be covered by the CWA. The application must include deal memos, contracts or any other income source for which there is a close approximation to the live events.
  6. Additional income and expense items requested by the IRS of the applicant must be submitted within the timeframes specified in the request from the IRS to continue the application process.

The DWA must agree to withhold income tax from payments made to the NRAAE, to pay the withheld tax to the IRS on the dates and in the amounts specified in the agreement, and to have the IRS apply the payments of withheld tax to the withholding agent's Form 1042 account. The DWA will be required to file Form 1042 and Form 1042–S to each NRAAE covered by the withholding agreement. The DWA will issue Form 1042–S to each NRAAE affected by the agreement. The NRAAE must attach all Form 1042-S to their U.S. federal individual income tax return to get credit for the federal income tax withheld by the designated withholding agent.

COVID-19 Impact on CWAs

The Central Withholding Agreement (CWA) program has received a number of inquiries regarding CWAs impacted by the COVID-19 due to event cancellations. Taxpayers or their representatives with CWAs impacted by the COVID-19 should contact the CWA employees assigned to their applications for further assistance. Those with CWA applications impacted by the COVID-19 who have not been assigned to a CWA employee should send a letter containing the name of the applicant, date of the application, a brief description of the issue, and name/phone number of the authorized representative via fax to 866-715-1507.

The IRS also established the Coronavirus Tax Relief page focused on steps to help taxpayers, businesses and others affected by the COVID-19.

Application for a Social Security Number

Individual nonresident aliens should apply for a social security number (SSN) immediately upon entering the U.S.A. There is no requirement to wait 10 days before applying for an SSN.For more information about the application requirements visit Social Security Administration.

References/Related Topics