- You hold U.S. stocks or ETFs through a broker and live outside the U.S.
- Your 1042-S shows 30% withheld on dividends
- Your country has a tax treaty with the United States
The situation
“I did not even notice the form had expired. Three years of dividends were taxed at twice the treaty rate.”
Claire lives in Lyon and holds a portfolio of U.S. dividend stocks through an international broker. When she opened the account she signed a W-8BEN claiming the France–U.S. treaty rate of 15% on dividends.
A W-8BEN is valid until the end of the third calendar year after it is signed. Hers lapsed at the end of 2021, the broker did not get a new one, and from 2022 every dividend was withheld at the statutory 30%. She found out when her accountant asked why her 1042-S forms showed double the usual tax.
Application path
- W-7 reason
- Reason b — nonresident alien filing a U.S. federal tax return
- Filed with
- Form 1040-NR for tax year 2024 with the 2024 Form 1042-S
The withholding had already happened, so the only way to get it back is a 1040-NR refund claim, and a return needs a taxpayer number. The W-7 goes on the most recent return; the 2022 and 2023 returns were filed once the ITIN was issued. No broker letter is needed on this path.
Documents
- Valid French passport
- Forms 1042-S from the broker for 2022, 2023 and 2024
- Proof of French tax residence (avis d’imposition)
- Form W-7 with Reason b checked
- Three Forms 1040-NR claiming the treaty rate on Schedule OI
- Form W-7 (COA) Certificate of Accuracy
- A new W-8BEN for the broker, sent after the ITIN arrived
Timeline
- Day 1Review of the three 1042-S forms and treaty article.
- Day 3Live video interview and passport certification.
- Day 5W-7 mailed with the 2024 Form 1040-NR.
- Week 9ITIN issued (CP565).
- Week 102022 and 2023 Forms 1040-NR filed with the new ITIN.
- Month 5–7All three refunds received by international check.
Issues we solved
The 2022 refund had a deadline. A refund claim must be filed within three years of the return’s due date, and for a nonresident without wages that due date was June 15, 2023.
We filed the 2022 return in the same month the ITIN arrived, well inside the June 15, 2026 cutoff. Waiting for the next tax season would have forfeited that year.
Claire also sold shares at a gain in 2023 and worried that was taxable too.
A nonresident who is in the U.S. for less than 183 days in the year generally owes no U.S. tax on stock sales. We reported nothing on those sales and explained why.
The numbers
| Dividends received, 2022–2024 | $54,000 |
| Tax withheld at 30% | $16,200 |
| Tax due at the 15% treaty rate | $8,100 |
| Refund | $8,100 |
Dividend income of $18,000 per year. Refund checks are issued in U.S. dollars.
Outcome
All three refunds arrived within seven months of the first filing. Claire signed a new W-8BEN with her ITIN, and the broker applies the 15% rate at source again.
She put a reminder in her calendar for December 2027, when the new form expires.
Questions people in this situation ask
Usually not. Most brokers accept your home-country tax number on the W-8BEN. You need an ITIN when the tax has already been over-withheld and you must file a 1040-NR to get it back.
Generally three years from the return’s due date. For a nonresident with only investment income, the due date is June 15 of the following year.
Bank deposit interest and most portfolio interest paid to a nonresident is exempt. Dividends are not, which is why they are withheld.
IRS sources
- Instructions for Form W-7 (Rev. December 2024)
- Publication 515 — Withholding of Tax on Nonresident Aliens
- Publication 519 — U.S. Tax Guide for Aliens
This is a representative case. Names and personal details are illustrative; the IRS rules, forms and calculations reflect tax year 2024. It is general information, not tax advice for your situation.