Question

Tax from Interest Income from CD, as Non Resident

Forum|Forum|2 years ago
February 8, 2024
1 reply
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Hello,

If a visitor has a US bank account, and interest income from C/D from the Bank, is he required to pay taxes as a non-resident? The bank already deducted the standard 30% from the interest income and sent the 1099-INT. Is he required to file a 1040-NR?

Not A Product Question

M

mglauner

Banks do not usually deduct income tax on Interest Income they pay out to an account holder. Was the 30% a Penalty they paid for closing their CD Account Early? It it was indeed income tax, they could file a 1040-NR to get that refunded.

The IRS does not require reporting/taxation of US Bank Interest for Non-Residents, unless it is connected with a US trade or business.

Here more Tax Tips for Resident and Non-Resident Aliens and Non-Taxable Interest for Non-Residents.

M

mmubaswiAuthor

Hi, thank you for the reply, yes it was withheld as tax and that's why the 1099 was generated. He doesn't have an ITIIN.

Critter-3

He is not required to file a 1040NR but he may want to file one to get any excess withholding refunded. An ITIN can be applied for by filing an W-7 and attaching the return to it.