What should I know about W-8 BEN?

Updating Form W-8 BEN

Note: Firstrade will send you an email when you are required to resubmit your Form W-8 BEN. You can also check your W-8 BEN status in your Account Profile.

W-8 BEN must be renewed every three years unless you have or apply for a U.S. Taxpayer ID (ITIN or EIN) and provide the number on your Form W-8 BEN, in which case you still need to resubmit.

Requirement to Complete Form W-8 BEN

Form W-8 BEN, Certificate of Foreign Status, must be on file with Firstrade. This form must be renewed every three years. If the Form W-8 BEN is no longer valid, Firstrade will assume that you are a non-U.S. person and withhold 30% U.S. tax on all reportable income payments (credit interest, cash dividends). Non-reportable incomes and gross proceeds will withhold 28% U.S. tax. Treaty rates, if applicable, will no longer apply.

Non-reportable income includes but not limited to:

  • Child support payments;
  • Gifts, bequests and inheritances;
  • Welfare benefits;
  • Cash rebates from a dealer or manufacturer for an item you buy; and
  • Reimbursements for qualified adoption expenses.

Note: If you complete Form W-8 BEN, you will not receive a Consolidated Form 1099, but you may receive Form 1042-S.

How Long Is Form W-8 BEN Valid?

Forms W-8 BEN are valid for the year in which they are signed and for the next three calendar years. For example, a Form W-8 BEN signed on March 5, 2020, remains valid through December 31, 2023, and must be resubmitted to Firstrade no later than December 31, 2023. If a change in circumstances causes any information on the form to be incorrect, this will render the form invalid. 

Who Should Complete Form W-8 BEN?

Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, allows you to certify that you are a not a U.S. person and claim treaty benefits under an existing tax treaty between the U.S. and your country of tax residence, if applicable.

You should complete Form W-8 BEN if:

  • You are opening an individual or joint account and are not a U.S. Citizen, green card holder or legal resident of the U.S.
  • You are the representative of an entity that is not organized in the U.S. but is recognized as a corporation under U.S. law.
  • You represent a foreign entity and you have made an election on IRS Form 8832 to be treated as a corporation for U.S. tax purposes.
  • You are a foreign tax-exempt organization or foreign private foundation that is not a recognized US charity.
  • You are the trustee of a complex trust as defined under US law.
  • You are the representative of an estate.

Part I identifies the name, location and the beneficial owner, which for purposes of Forms W-8 BEN, is the owner of the account.

In Part II you must certify your country of tax residence or incorporation in order to claim tax treaty benefits, if you are the resident of a treaty country.

Withholding Penalty

If you fail to provide a Form W-8 BEN, or do not resubmit a new W-8 BEN when prompted upon the three-year expiration, additional withholding will apply. Firstrade encourages its customers to consult with their tax advisors for further guidance on how to seek relief for any tax withheld.

Trading Restrictions

If your W-8 BEN is expired, your account trading privileges will be restricted. You can check your W-8 BEN status to see when you last filled out the form and when you need to renew it by. 

How long does it take to process W-8 BEN renewal?

It usually takes 2-3 business days to process the W-8BEN renewal request. 

If you recently received an email reminder to renew your W-8BEN form, and you have already submitted a renewal, you may disregard the email.

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