What do I do if I don’t know which tax form I need to complete?

When you get to the Tax Forms page during registration in the Payee Dashboard, you will see a link “Start the tax form questionnaire” at the bottom of the page.

 

 

This questionnaire will help you determine which tax form you are required to submit. Tipalti suggests the relevant tax form based on the answers you provide in the questionnaire. Answers are not saved in the system. Therefore, if you exit before completion, you will have to restart the questionnaire.

The following table lists the questions in the tax form questionnaire and the direction of flow based on your answers.

 

 

What is the difference between all the US tax forms available?

W-9

You need to complete the W-9 form if your entity is incorporated in the US or you are an individual and one of the following applies:

  • You are a US citizen.
  • You are a resident of the US.
  • You have dual citizenship with one citizenship being US.
  • You are subject to taxation as a US citizen.
  • You were born in the US and have not formally renounced US citizenship.

The W-9 form can be completed via Tipalti’s online wizard.

TIN Validation

If your payer is collecting a Taxpayer Identification Number (TIN) from payees, then it is validated through Tipalti’s online wizard. The most common TINs are:

  • Social Security Number (SSN) (for individuals)
  • Employer Identification Number (EIN) (for companies)
  • Individual Taxpayer Identification Number (ITIN)

Note: If special characters are included in your legal name, Tipalti strips these characters and leaves only the ones permitted by the Internal Revenue Service (IRS). If your name does not match the name associated with the TIN at the IRS, then TIN validation fails and you will be “unpayable”.

For further information on TINs, visit the TIN page on the IRS website.

 

W-8BEN

You need to complete the W-8BEN form if you are an individual who is not:

  • A US citizen
  • A resident of the US
  • Subject to taxation as a US citizen
  • US born

And who:

  • Has no income effectively connected with the conduct of trade or business within the US
  • Is not acting as Intermediary
  • Is not receiving a compensation for personal services performed in the US for which you are claiming a treaty benefit
  • The W-8BEN form can be completed via Tipalti’s online wizard. Instructions on how to complete the form are provided.

 

 

 

 

W-8BEN-E

Non-US entities that have US-sourced income are required to complete a W-8BEN-E form. This form can be completed via Tipalti’s online wizard. Instructions on how to complete the form are provided.

Claiming Treaty Benefits

When claiming treaty benefits on the W-8BEN-E form, the entity must satisfy the LOB article of that treaty. For the list of types of LOB provisions, refer to the W-8BEN-E form, Part III, 14.b. For a description of the LOB for treaty claims, refer to the W-8BEN-E instructions.

You must do one of the following:

  • Check the box associated with the type of LOB provision relevant to the treaty benefits being claimed.
  • Check the box that indicates the entity has received a favorable discretionary determination from the US competent authority indicating it qualifies for the treaty benefits being claimed.

 

W-8ECI

You need to complete the W-8ECI form if you are an individual and your income is effectively connected with the conduct of trade or business within the US. The W-8ECI form and instructions on how to complete the form are provided. This form must be downloaded, completed manually and uploaded to the Payee Dashboard.

 

W-8IMY

You need to complete the W-8IMY form if your entity is a foreign partnership, a foreign simple trust or a foreign grantor trust (and not claiming treaty benefits) or you are an individual acting as Intermediary. The W-8IMY form and instructions on how to complete the form are provided to the payee. This form must be downloaded, completed manually and uploaded to the Payee Dashboard.

 

W-8EXP

You need to complete the W-8EXP form if your entity is representing a foreign government, an international organization, a foreign central bank of issue, a foreign tax-exempt organization, a foreign private foundation or government of a US possession claiming the applicability of section(s) 115(2), 501(c), 892, 895 or 1443(b); and, the following applies:

  • The entity is not an individual.
  • The entity is not incorporated in the US.
  • The entity is not a foreign partnership, a foreign simple trust or a foreign grantor trust (and not claiming treaty benefits).
  • The income of the entity is not effectively connected with the conduct of trade or business within the US.

The W-8EXP form and instructions on how to complete the form are provided. This form must be downloaded, completed manually and uploaded to the Payee Dashboard.

8233

You need to complete the 8233 form if you are receiving compensation for personal services performed in the US for which you are claiming a treaty benefit. The 8233 form and instructions on how to complete the form are provided. This form must be downloaded, completed manually and uploaded to the Payee Dashboard / Suppliers Portal.

Do tax forms expire?

Some tax forms expire, while others do not. Seven days prior to expiration, you will receive a tax form expiration notice, which advises you to submit a new form.

The following tax forms are valid for the year signed plus three following calendar years, after which the forms expire automatically.

  • W-8BEN
  • W-8BEN-E
  • W-8ECI
  • W-8EXP

The 8233 form and the Certificate of No US Activities expire annually from the date signed. The W-8IMY and W-9 forms have no expiration.

 

Does US tax withholding apply to me?

It depends on whether your income is US sourced or non-US sourced.

US-Sourced Income

Federal withholding rates are based on treaty country and income type and are only applicable when income is US sourced. Please note that your payer may also have additional withholdings enabled, such as “State withholding”. Check with your payer for further information.

Non-US-Sourced Income

If you have no income connection to the US (your income is not sourced by the US in terms of location, employees or equipment), withholding rates are not applicable under the following conditions:

  • Your income type is “Other Income (Services)” or “Artists and Athletes”.
  • You have signed a Certificate of No US Activities.

For information on US tax withholding for non-US persons, visit this page on the IRS website.

 

What if I don’t have a Tax Identification Number (TIN)?

If you are a US business or individual, or a non-US business with US activities, you need a TIN. Please note that it may take several weeks to obtain a TIN. Visit the TIN page on the IRS website for further information.

 

 

 

Do I need to submit additional documents besides tax forms?

It depends on the type of US tax form submitted and the information you entered on the tax form. You may be required to provide additional documents for verification and / or an explanation as to why certain information was entered. The following table provides examples of when additional documents are required.

 

 

 

If you have any questions, please email [email protected] with your name, website, account number, and inquiry – we’re happy to help!