POD Beneficiaries Who Are Not US Citizens

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Question:

An account holder passed away and named POD beneficiaries who are not US citizens and do not reside or work in the US. No relation to the US other than a family member left them money. The beneficiaries each want to take their share of the account however do not have SSN or ITIN. What do they need to do? These are non IRA funds.

Answer:

Answer by Randy Carey: What do they need a SSN or ITIN for? Upon proper identification, you cut them a cashier's check.

Answer:

Answer by Ken Golliher: If the accrued interest paid after the DOD did not exeed $10 per beneficiary you would not have a responsibility to file a 1099INT. If if did, you would impose backup withholding on the entire amount. In order to have the amount withheld returned to them the beneficiaries would have to file a U.S. return.

Answer:

Answer by Randy Carey: Could they not just give you a W-8BEN? You don't have to have a SSN/ITIN to complete one of those and avoid backup withholding..

Answer:

Answer by Ken Golliher: That would work.

First published on BankersOnline.com 3/11/13