W-8BEN for K1-to-AOS filer

[EatBulaga 317]

Greetings Immigration Tax Experts,

My foreign beneficiary entered the US on a K1 visa, and we married and have filed for the AOS/EAD/AP.

Prior to entering the US, she transferred a sum of money from her foreign savings account directly to my US bank account to hold until she got here to eventually deposit into a US bank to her name.

After she entered the US, we proceeded  to do the SSN, marriage, open bank accounts/joint accounts, etc. with her I-94 and foreign passport.

And I transferred the sum of money from my account to her individual account.

 

After her I-94 expired, we received a W-8BEN form from the bank.

https://www.irs.gov/instructions/iw8ben

https://www.irs.gov/pub/irs-pdf/fw8ben.pdf

Part1 of the W-8BEN, Identification of Beneficial Owner is fairly straightforward.

But Part2, Claim of Tax Treaty Benefits and Part3, Certification, I'm not sure what I am having her sign or fill out?

 

Something that further concerns me is that my foreign spouse has yet to receive her EAD and has not worked yet.

But she is collecting some interests from the bank which constitutes as US income, and subject to 30% US tax rate according to the W-8BEN.

How is this going to affect her AOS/GC application? Or even future Naturalization application?

I'm not even sure how to address this? Should I get a tax attorney or immigration lawyer?

 

Have any other K1-to-AOS filers experience filing the W-8BEN before?

How should we complete the W-8BEN?

How did you deal with these bank interests issues?

Thanks in advance for any response.

Edited September 24, 2022 by EatBulaga

[Lil bear 4,261]

37 minutes ago, EatBulaga said:

Greetings Immigration Tax Experts,

My foreign beneficiary entered the US on a K1 visa, and we married and have filed for the AOS/EAD/AP.

Prior to entering the US, she transferred a sum of money from her foreign savings account directly to my US bank account to hold until she got here to eventually deposit into a US bank to her name.

After she entered the US, we proceeded  to do the SSN, marriage, open bank accounts/joint accounts, etc. with her I-94 and foreign passport.

And I transferred the sum of money from my account to her individual account.

 

After her I-94 expired, we received a W-8BEN form from the bank.

https://www.irs.gov/instructions/iw8ben

https://www.irs.gov/pub/irs-pdf/fw8ben.pdf

Part1 of the W-8BEN, Identification of Beneficial Owner is fairly straightforward.

But Part2, Claim of Tax Treaty Benefits and Part3, Certification, I'm not sure what I am having her sign or fill out?

 

Something that further concerns me is that my foreign spouse has yet to receive her EAD and has not worked yet.

But she is collecting some interests from the bank which constitutes as US income, and subject to 30% US tax rate according to the W-8BEN.

How is this going to affect her AOS/GC application? Or even future Naturalization application?

I'm not even sure how to address this? Should I get a tax attorney or immigration lawyer?

 

Has any other K1-to-AOS filers have experience filing the W-8BEN before?

How should you complete the W-8BEN?

How did you deal with these bank interests issues?

Thanks in advance for any response.

You are going to file taxes as married filing joint and she is considered a resident for tax purposes by the IRS, even if she hasn't received AOS/EAD by then 

 

This is the usual process for K1-AOS  spouses 

 

As she has a SSN she uses the W 9 form. She is a resident alien  for tax purposes so as per the instructions at the top of the form. “Do not use this if “… she uses W-9 and enters her SSN 
 

Edited September 24, 2022 by Lil bear

[EatBulaga 317]

17 minutes ago, Lil bear said:

You are going to file taxes as married filing joint and she is considered a resident for tax purposes by the IRS, even if she hasn't received AOS/EAD by then 

 

This is the usual process for K1-AOS  spouses 

 

As she has a SSN she uses the K 9 form. She is a resident alien  for tax purposes so as per the instructions at the top of the form. “Do not use this if “… she uses K9 and enters her SSN 
 

What is the K9 form?

I can't find the IRS link to a K9 form?

Do you mean the W9?

[Lil bear 4,261]

7 minutes ago, EatBulaga said:

What is the K9 form?

I can't find the IRS link to a K9 form?

Do you mean the W9?

Oops. Yes. w9. 

[Wuozopo 4,293]

15 hours ago, EatBulaga said:

Something that further concerns me is that my foreign spouse has yet to receive her EAD and has not worked yet.

But she is collecting some interests from the bank which constitutes as US income, and subject to 30% US tax rate according to the W-8BEN.

How is this going to affect her AOS/GC application? Or even future Naturalization application?

I'm not even sure how to address this? Should I get a tax attorney or immigration lawyer?

In IRS terms, there is EARNED INCOME (from a job, a salary, wages for working) and UNEARNED INCOME (interest, dividends, investment income). She is gathering some unearned income that has no effect on her immigration process. You don’t need to fix this at all. 

 

15 hours ago, EatBulaga said:

How should we complete the W-8BEN?

How did you deal with these bank interests issues?

At this point, your spouse has nothing on paper that makes her a “US person”. It’s a limbo K1s find themselves in while they wait on the immigration process to move forward. So the bank is following the rules to get a W8BEN from her as a foreign person. She can fill it out skipping the treaty section. Once she gets EAD or AOS, then it can be changed at the bank.
 

The bank has to hold out 30% of the interest that would normally go straight into the account of a “US person”. It’s probably not that much money How much interest has she earned from the bank.. $5 maybe? which would be $1.50, not stolen from her, but held back toward taxes that might be owed. It will all come back when you file a 2022 joint tax return if you are getting a refund. 
 

i don’t think a W8BEN is a crisis at all while a K1 is is the limbo period. The bank doesn’t understand the nuances of K1 immigration so if it is easier to have one on file for the time being, then do it. 

[EatBulaga 317]

Just to report some of the lessons learned after completing the W-8BEN form for our bank...

 

1. The W-8BEN is filled out from the perspective of the foreign spouse.

2. We ended up writing a cover letter explaining our K1-to-AOS process just in case the bank agent is not familiar with the process of the "authorized stay from filing the I-485" vs. "non-resident alien". It is the W-8BEN referring to the "non-resident alien" that has me nervous.

3. Having the SSN early in our process is an advantage to filling out the W-8BEN.

4. Getting the driver's license within the I-94 window may have been advantageous as an extra identification to show name change and to prove U.S. permanent address, especially with the Real ID star.

5. We included the following documents with our W-8BEN to our bank:

 

Cover Letter

W-8BEN

Copy of I-797C for I-485

Copy of Marriage Certificate (to verify the AOS process and the name change)

Copy of I-94

Copy of the State Drivers License

Copy of K1 visa

Copy of the foreign passport

 

The reason we are very cautious about the W-8BEN and maybe even over-documenting is because we are not sure how much the IRS affects the USCIS process, or vice versa?

Maybe someone who's more knowledgeable can comment?

The last thing we want is to get in trouble with the IRS in the middle of our green card process.

Or am I overthinking the whole thing?

Edited October 1, 2022 by EatBulaga

[Lil bear 4,261]

1 minute ago, EatBulaga said:

Just to report some of the lessons learned by completing the W-8BEN form for our bank...

 

1. The W-8BEN is filled out from the perspective of the foreign spouse.

2. We ended up writing a cover letter explaining our K1-to-AOS process just in case the bank agent is not familiar with the process of the "authorized stay from filing the I-485" vs. "non-resident alien". It is the W-8BEN referring to the "non-resident alien" that has me nervous.

3. Having the SSN early in our process is an advantage to filling out the W-8BEN.

4. Getting the driver's license within the I-94 window may have been advantageous as an extra identification to show name change and to prove U.S. permanent address, especially with the Real ID star.

5. We included the following documents with our W-8BEN to our bank:

 

Cover Letter

W-8BEN

Copy of I-797C for I-485

Copy of Marriage Certificate (to verify the AOS process and the name change)

Copy of I-94

Copy of the State Drivers License

Copy of K1 visa

Copy of the foreign passport

 

The reason we are very cautious about the W-8BEN and maybe even over-documenting is because we are not sure how much the IRS affects the USCIS process, or vice versa?

Maybe someone who's more knowledgeable can comment?

The last thing we want is to get in trouble with the IRS in the middle of our green card process.

Or am I overthinking the whole thing?

IRS and USCIS don't talk to each other. USCIS only ever wants evidence that taxes have and are being paid and any outstanding taxes are being paid off via an agreement with IRS 

[EatBulaga 317]

1 hour ago, Lil bear said:

IRS and USCIS don't talk to each other. USCIS only ever wants evidence that taxes have and are being paid and any outstanding taxes are being paid off via an agreement with IRS 

Something that I thought was odd at the time but may make more sense now is that the W-8BEN form that the bank mailed to us to complete and return looks a little different than the W-8BEN on the IRS.gov site.

 

It seems to me that the bank just wants the W-8BEN information in their format and understanding to report the information to their system to know how much money needs to be sent to the IRS (à la 30%). It's very likely that the IRS never sees the actual bank's W-8BEN form, nor really cares to see it as long as the money transferred seems right. And as you said, the USCIS just wants the evidence that the taxes have been paid. Or might I add that there is not any criminal activity with the IRS. And as @Wuozopo mentioned, the 30% is all in the wash when we file for the joint tax return.

Edited October 1, 2022 by EatBulaga

[Wuozopo 4,293]

17 hours ago, EatBulaga said:

It is the W-8BEN referring to the "non-resident alien" that has me nervous.

She is a non-resident alien at this time by IRS definition. Nothing wrong with that. Separate the IRS and USCIS in your thoughts. Right now you are only dealing with a bank which has a legal obligation to classify customers so they can hold back 30% of earnings toward future taxes that might be owed. It is only an IRS matter and has zero to do with USCIS. Had you had a joint account with your SSN as the primary, this probably wouldn’t have come up. But because she wants an account in her name only, she has to get it as a non resident for the time being. 
 

You can get familiar with the IRS terms resident alien (RA) and non-resident alien (NRA) in Publication 519. Start reading the section on page 3. https://www.irs.gov/pub/irs-pdf/p519.pdf  Those terms and definitions only apply to tax returns. 

 

17 hours ago, EatBulaga said:

The reason we are very cautious about the W-8BEN and maybe even over-documenting is because we are not sure how much the IRS affects the USCIS process, or vice versa?

Maybe someone who's more knowledgeable can comment?

The last thing we want is to get in trouble with the IRS in the middle of our green card process.

Or am I overthinking the whole thing?

You are overthinking this. Documenting your K1 immigration history to the bank was not appropriate or needed. 
 

As far as differences in form layouts—- Your employer may use a totally different W2 layout than your neighbor’s employer.or a sample found on the IRS website. As long as they communicate the correct information, the design isn’t critical. Same with the layout of the W8-BEN.

 

[EatBulaga 317]

On 10/2/2022 at 12:28 PM, Wuozopo said:

She is a non-resident alien at this time by IRS definition. Nothing wrong with that. Separate the IRS and USCIS in your thoughts. Right now you are only dealing with a bank which has a legal obligation to classify customers so they can hold back 30% of earnings toward future taxes that might be owed. It is only an IRS matter and has zero to do with USCIS. Had you had a joint account with your SSN as the primary, this probably wouldn’t have come up. But because she wants an account in her name only, she has to get it as a non resident for the time being. 
 

You can get familiar with the IRS terms resident alien (RA) and non-resident alien (NRA) in Publication 519. Start reading the section on page 3. https://www.irs.gov/pub/irs-pdf/p519.pdf  Those terms and definitions only apply to tax returns. 

 

You are overthinking this. Documenting your K1 immigration history to the bank was not appropriate or needed. 
 

As far as differences in form layouts—- Your employer may use a totally different W2 layout than your neighbor’s employer.or a sample found on the IRS website. As long as they communicate the correct information, the design isn’t critical. Same with the layout of the W8-BEN.

 

Thanks!

Just an update. Our bank sent us a letter saying "Unfortunately, we're unable to process it because of incorrect or missing information."

So we called the bank's Tax Forms Support department.

We explained the situation. Essentially they told us, if we don't update the W-8BEN or don't file the W8-BEN, then by default the bank will withhold 30% from the interests, which is okay with us since all that will be in the wash when we joint file taxes in April.

 

So the bank assistant then forwarded us to an automated voice input for W-9 information for the foreign spouse.

 

In addition to the SSN, bank account, etc., 4 automated questions were asked with 1 question asking are you an US citizen, which we made sure to say "No".

In retrospect, we should have asked the bank to send us the W-9 tax form since there are no records of what we voice input over the phone for the 4 questions. 

And now I'm nervous if we made a mistake?

 

So the lesson learned here is if the foreign spouse wants his/her own bank account in the US, it is better to not file the W8-BEN and just have the bank withhold 30% of the interests. The withholdings will be part of the IRS payment when you file for taxes in April anyway.

Edited November 12, 2022 by EatBulaga