If you are a non-resident alien and received US-sourced income in 2010 from which 30% was withheld, read on.
If you are able to claim an exemption from the 30% withholding through the treaty, (and not all income can be exempted using the treaty), you have two possibilities.
1. You have until 15 March 2011 to request that the 30% withholding be paid by the US payor (the withholding agent). This usually entails furnishing form W-8BEN to that withholding agent. The agent is authorised by IRS to make a refund of the undeposited tax to the payee if it occurs by 15 March of the year following the year of withholding.
2. If you leave it past 15 March 2011 you will need to obtain a US taxpayer identification number (TIN) and file a US tax return to request a refund.
One of the inquiries I receive regularly is about how to claim withholding tax that has been deducted on US gambling winnings.
Unfortunately, the treaty does not provide for relief from US withholding on gambling winnings.
However, no US withholding tax is imposed on nonbusiness gambling income won by a non-resident alien in the games of blackjack, baccarat, craps, roulette, or a big-6 wheel in the US.
Note that this rule won’t apply if the gambling winnings are effectively connected with a US trade or business, such as in the case of professional gamblers who are non-resident aliens but who have sufficient activity in the US to constitute carrying on a US business.
A final note on withholding by US payors. As withholding agents they are personally liable if they were required to withhold 30% and incorrectly do not. It is up to the payee to advise the withholding agent of the requirement, or not, to withhold.
