Withholding of Tax on Nonresident Aliens and Foreign Entities, Publication 515 (2023)

Publication 515, the Employer Fringe Benefit Guide, is an authoritative document provided by the U.S. Internal Revenue Service (IRS) to guide employers in understanding and complying with tax regulations related to fringe benefits for foreign entities. It covers key topics such as tax treaty terminations, withholding responsibilities, and reporting changes.

What's New In 2023?

  • There are regulations (T.D. 9926) related to withholding and reporting under sections 1446(a) and (f) starting in 2023.
  • The regulations cover withholding and reporting requirements under section 1446(f) on transfers of interests in certain partnership interests.
  • Specific provisions of the section 1446(f) regulations apply to transfers on or after January 1, 2023.

Key Reminders

  • Central Withholding Agreement (CWA) simplified application process, with a temporary waiver of the income requirement for certain cases.
  • Deposit interest of $10 or more paid to certain nonresident alien individuals must be reported on Form 1042-S.
  • Electronic deposits and filing electronically for Form 1042-S are emphasized.

For a detailed overview of Publication 515, the Employer Fringe Benefit Guide, please refer to the attached PDF below. Or, to review the current year's Publication 515, click here.