W-8BEN: documenting foreign status for a US payer
Form W-8BEN documents foreign status for certain payments from a US payer, such as investment income, so the payer can apply the right withholding and any treaty rate. It does not fit every situation.
Last reviewed by US Tax Professionals, a cross-border tax practice in Winnipeg.
Who uses it
Individuals who are not US citizens or US residents give it to the payer, not the IRS, for certain payments such as dividends, interest or royalties. It is generally not used by US citizens or residents, or for pay for services performed in the US, which use other forms. Living in Canada does not by itself settle your US status, and being paid through a US payroll does not by itself make wages US-source: your status, where you do the work, and the type of payment all matter.
What happens if you skip it
Without valid documentation, a payer may withhold at a higher rate, in some cases backup withholding. Whether overwithheld tax can be corrected through the payer or recovered on a US return depends on the payment and your facts.
How the treaty rate applies
The Canada-US tax treaty reduces withholding on many types of investment income, and the W-8BEN is how you claim that rate with the payer. Withholding on employee wages is a separate question to review with your employer; the W-8BEN is not a general payroll fix.
Not sure how this applies to your situation?
This guide is general information, not individualized advice. Request a consultation to see how W-8BEN fits your actual filing.
Who this usually applies to