BENEFICIARY, IRS & TAXES

    My wife is the beneficiary of my retirement funds.
(NOT talking about SS, but CALPERS)

She currently has a ITIN just for tax purposes, but assume she will lose her eligibility for this once I pass.



Question is this, Her being a non US citizen and never having lived there, will she be required to file a tax return with IRS from the Phils and pay taxes on the monthly benefit funds or can she go exempt and receive 100% of the monthly beneficiary amount ?



Seems there should be a easy answer to this but for the life of me I can’t seem to figure it out. I know there are a lot of educated intelligent people here, so maybe someone has some input, advise or guidance to share with me

I asked bing. Maybe not. Suggest you investigate more:

"If the recipient is not a U.S. person, meaning they are not a U.S. citizen, resident alien, or entity that is treated as a U.S. person for tax purposes, then they may be able to claim an exemption from withholding of U.S. federal income tax (FIT) under a tax treaty by completing Form W-8BEN2, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting, and delivering it to the U.S. payor1. They must report their U.S. Taxpayer Identification Number (TIN) on Form W-8BEN for it to be valid for treaty purposes1. However, even if they claim an exemption from withholding under a tax treaty, they may still have to pay taxes in their own country on their foreign pension income."

@danfinn

Thank you, I will follow up on your suggestion and the Forms you referenced

Upon trying to research those forms, etc, I realized the terms used are way over my head, I will just have to schedule a visit with tax pro next time i’m in the States.

Update:

For anyone in my situation stated above and curious as to what happens, this is what I have Learned.

1) Indeed a Non resident Alien who is receiving wages or benefits derived from within the US are subject to Federal taxes.

2) IRS mandates that the Payor withold   

    30% Tax monthly, Yeah High

3) As Danfinn stated up above, my wife can

     upon receiving her benefit File with

     Calpers using form W-8BEN and the tax

     will  be reduced.

     But no where can I find where is it

     documented as to what % it

     would be reduced to.

So in my wife’s instance she would have Two choices when initially receiving her benefit with Calpers.

1) Just take the 30% hit monthly, and file a

    Return at end of year and probably

    receive 90% of those 12 months

    witholding tax back in the form of a

    Refund.

Or

2) File the form W-8BEN with Calpers

    allowing them to reduce the monthly

    witholding tax to what ?? Idk

In any event she will still be required to file

a yearly IRS return from here, regardless.

I would just ask Calpers and your U.S. tax accountant.

Why ?

I already have my answers as I noted above…

Why ?
I already have my answers as I noted above… - @vehicross100

Oh really? Why?

Because you wrote:

3)  File with

     Calpers using form W-8BEN and the tax

     will  be reduced.

     But no where can I find where is it

     documented as to what % it

     would be reduced to.

2) File the form W-8BEN with Calpers

    allowing them to reduce the monthly

    witholding tax to what ?? Idk

I'm no English expert but what part of "No where can I find" and "Idk" means you have your answers???

Your missing the whole gist of it.

But not here to debate. Farewell

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