Federal Tax Withholding

Be compliant with new federal regulations

Collect, validate and manage Forms W-8 and W-9 for federal tax withholding compliance.

Forms W-8

Forms W-8 enable a non-resident in the U.S. to avoid or reduce tax withholdings from U.S. source income including rental fees, bank deposit interest and dividends. There are requirements for soliciting these forms, responding to time-sensitive notices and retaining forms.

Legacy Form W‑8BEN is not sufficient to comply with the Foreign Account Tax Compliance Act (FATCA). If you have foreign payees who are not subject to FATCA, the IRS is no longer accepting the previous forms. Form W‑8BEN now has been split into two new forms:

  • 2014 Form W‑8BEN: For use by foreign individuals
  • 2014 Form W‑8BEN‑E: For use by foreign entities

It’s important to begin the process of collecting the new Forms W‑8 from all of your foreign payees immediately to ensure compliance.

Form W-9

A Form W-9 certifies the vendor is registered with the IRS and the payee is not subject to backup withholding. It is required of payees to confirm they are U.S. persons and to provide their appropriate Taxpayer Identification Number (TIN) for 1099 reporting.

The IRS released a new version of the Form W‑9 in March 2014. Key changes to this form include the addition of “Exemption for FATCA Reporting Code” and the addition of a FATCA-specific certification statement.

Ensure compliance

An automated solution like VendorCertCapture, can offer numerous benefits in helping organizations deal with FATCA requirements, including:

  • Ensured compliance and reduction of B-notices
  • Reduced paperwork and streamlined processes
  • Improved vendor experience to complete the forms

Ready to see more? View more federal withholding resources in our Resource Center.

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