USA tax question

[novo58]

Hoping some USA members can offer some help.

I am asking on behalf on my neighbour......................

Thai lady married to a USA citizen . Her husband died and now she discovers she is entitled to a ( smallish) pension payout.

THe paperwork states that the US Federal Govt will deduct a 20% withholding tax ( possibly about US$1500- US$2000)from the lump sum payout amount she will receive.

As this is her ONLY income of any type from the USA and there will NEVER be any further income this year or any other year...............................

the question is :

Can she claim this withheld tax amount back .......................and if so how does she go about doing it.???

Thanks in advance for all answers

[taxout]

Look at the Thai-US Tax Treaty, Article 20 specifically.

https://www.irs.gov/pub/irs-trty/thailand.pdf

It seems that pensions and the like paid from the U.S. are subject to tax in Thailand, but not the U.S., except that payments from Social Security and the like are subject to tax in the U.S., not Thailand.

So if this is a payment under a private pension scheme covering her husband's employment, she should file Form W-8BEN with the payor claliming exemption from withholding under the treaty.

https://www.irs.gov/uac/form-w-8ben-certificate-of-foreign-status-of-beneficial-owner-for-united-states-tax-withholding

This assumes the payment is being made to her as widow, and not to her husband's estate.

[thaihome]

It sounds like this could likely be a 401k that listed her as beneficiary. In that case it can get very complicated to get the payout. She is going to need to have a taxpayer identification number (TIN) in order to get the money. Hopefully her husband already did that and has been filling joint returns all along. She is going to have to have the 20% withheld and then file a US tax return for that year to get any refund due.

TH

[Gary A]

That is likely. I get a small pension from Chrysler. The morons in their accounting sent me a form to fill out. It said that they will withhold 20 percent of my pension. Right at the top of this form, it tells you NOT to use this form if you are a US citizen. I happen to be a US citizen and paid Social Security for the 22 years I worked for Chrysler. They still insisted that I had to fill out the form. They told me that since I live in Thailand, I cannot be a US citizen. I replied that I was requesting that they give that form to someone who can read English. I also told them that there was no way I was going to fill out that form and to send me the name of their boss. I also told them that if they did deduct 20 percent that the IRS may be interested to know that Chrysler pension employees could not understand simple English.

So, yes, they will deduct 20 percent from non citizens who get a US pension.

[taxout]

If that happens again, just send the withholding agent a completed Form W-9, in which you certify you are a U.S. person and provide your Social Security number.

https://www.irs.gov/pub/irs-pdf/fw9.pdf

[Gary A]

If that happens again, just send the withholding agent a completed Form W-9, in which you certify you are a U.S. person and provide your Social Security number.

https://www.irs.gov/pub/irs-pdf/fw9.pdf

I didn't have to because I also suggested that they check my records and my Social Security number. They must have found someone who could read English. They never made the deductions and my checks are still being deposited in my bank.