Distribution to Non-US Citizen

[Dazednconfused]

Participant was working here with green card, then left the US and gave up green card back in 2004, so no longer living here. He received a distribution in 2009, the 1099 was issued with his ssn.

However, the investment company withheld the 20% but left in his account for some reason. Since he was not a US citizen I guess they weren't sure if they should pay the tax or what. I think they should have just paid the tax. Is there some special form that needs to be completed since he was a not a US citizen that I don't know about?

Thanks!

[Guest Whatup]

I think the rate of withholding to a nonreside should be 30% unless covered by a treaty exemption. I think they complete a W-8 Ben which tells the withholding agent that they are a foreign person, and if they qualify for a reduced rate of withholding they would cite the treaty article.

[Dazednconfused]

Thanks, I don't think that that was done in this case, I guess they should just pay the tax under the participants ssn. The majority of this was done by the investment company so I am in the dark on most of the process.

Any thoughts on paying the tax under the ssn even though he is 'out of the country'? I guess it is really the only option now....

Thanks again!