Persons Subject to NRA Withholding


NRA withholding applies only to payments made to a payee that is a foreign person. It does not apply to payments made to U.S. persons.

Usually, you determine the payee's status as a U.S. or foreign person based on the documentation that person provides. However, if you have received no documentation or you cannot reliably associate all or a portion of a payment with documentation, then you must apply certain presumption rules.

The “Identifying the Payee” section in Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, has a longer discussion of how to handle payments in these situations:

  • When the payee is not the person you pay
    • U.S. agent of a foreign person
    • Disregarded entities
    • Special Chapter 4 rules
  • Flow-Through Entities
    • Chapter 3 payees
    • Chapter 4 payees
    • Foreign partnerships
    • Foreign simple and grantor trusts
    • Fiscally transparent entities claiming treaty benefits
  • Foreign Intermediaries
    • Special rule for chapter 4
    • Nonqualified intermediaries (NQI)
    • Qualified intermediaries (QI) 
      • Qualified derivatives dealers (QDDs)
      • Branches of financial institutions
      • QI agreement
      • Documentation requirements
      • Reporting requirements
    • U.S. branches of foreign banks and foreign insurance companies
    • Withholding foreign partnership and withholding foreign trust
      • WP agreement and WT agreement
      • Documentation

References/Related Topics