claim back USA Tax

Nomunnofun1

kirstycobie said:

Nomunnofun1 said:

kirstycobie said:

Dazed_and_C0nfused said:

I wonder if the op means claim from IRS?

i have no idea what the difference is between tax and irs? i just know he’s a esports player and won a lot of money and trying to help him claim some tax back and if it should be uk tax he is only paying or usa tax?

The question was - do you mean claim tax back from the UK tax authorities (HMRC) or from US tax authorities (IRS)?

so he has paid tax in usa so it’s claiming usa tax back so we can pay uk tax (im guessing this is the way as we are uk citizens and not usa)

So - if you’re unable to claim the tax back from the US authorities you can claim foreign tax relief up to the amount of U.K. tax due on the American income. 

For example - US tax paid (converted to sterling) £3000. 

U.K. tax due on the US income -£2500. 

Foreign tax relief due £2500 reducing U.K. tax to NIL. 

The other £500 is lost.

Retirebefore50

kirstycobie said:

Nomunnofun1 said:

kirstycobie said:

Dazed_and_C0nfused said:

I wonder if the op means claim from IRS?

i have no idea what the difference is between tax and irs? i just know he’s a esports player and won a lot of money and trying to help him claim some tax back and if it should be uk tax he is only paying or usa tax?

The question was - do you mean claim tax back from the UK tax authorities (HMRC) or from US tax authorities (IRS)?

so he has paid tax in usa so it’s claiming usa tax back so we can pay uk tax (im guessing this is the way as we are uk citizens and not usa)

@kirstycobie
 I can assist with this. I previously posted above, if you require help.

Retirebefore50

Dido1875 said:

Hi, can anyone help fill out the W7 and 1040NR to claim tax withheld for win in Las Vegas casino please. Hoping to not have refund rejected because forms incorrect.

@Dido1875 I can assist with this, if you require help. I prepare these regularly.

Cook_County

I was the first IRS Certifying Acceptance Agent in the UK - way back in the year 2000. Happy to assist with an ITIN application and Form 1040-NR. HMRC will not allow a credit for refundable US tax. 

Sea_Sm0ke

@Retirebefore50, I could do with some advise on this if you could get in contact with me it would be appreciated. Went to Vegas won a jackpot (over 1200) and they took 30%tax and said I can claim it back. 

Cook_County

Sea_Sm0ke said:

@Retirebefore50, I could do with some advise on this if you could get in contact with me it would be appreciated. Went to Vegas won a jackpot (over 1200) and they took 30%tax and said I can claim it back. 

You'll need an ITIN application filed with the IRS, plus a US tax return. If the tax was withheld in 2025 the earliest you could file these will be the end of January 2026.

R42

Cook_County said:

I was the first IRS Certifying Acceptance Agent in the UK - way back in the year 2000. Happy to assist with an ITIN application and Form 1040-NR. HMRC will not allow a credit for refundable US tax. 

@Cook_County / @Retirebefore50
How would one reclaim US tax held from RSUs? I understand an ITIN and Form 1040-NR is required... Anything else such as Schedule OI, NEC, etc...? Also a UK employee with no USA links

EdSwippet

R42 said:

How would one reclaim US tax held from RSUs? I understand an ITIN and Form 1040-NR is required... Anything else such as Schedule OI, NEC, etc...? Also a UK employee with no USA links

Definitely yes to Schedule OI. Other than that, likely nothing else. With "no USA links" you probably have nothing that would go on Schedule NEC. ITIN application processing times are around 7-11 weeks. The IRS seems to be handling simpe 1040-NRs relatively quickly currently, perhaps 4-8 weeks. However, you cannot file until after around Feb the year following the withholding, so if you've paid unnecessary US tax in 2025 you won't see a refund until around March or April 2026 at the earliest.

Something to look at is why you ended up paying US tax on RSUs in the first place. As a nonresident alien, there shouldn't be any to pay; usually only (typically a discouragingly high rate of) UK tax and NI withholding. Did your provider request (or did you hand them) a W-8BEN? That should have neutered any general requirement for them to withhold US tax.

Beyond all this, of course, you then have to square all of this away with HMRC. Depending on timing, that might mean paying HMRC their slice well before getting any refund from the IRS. (Possible cash-flow issue there, then.)

R42

EdSwippet said:

R42 said:

How would one reclaim US tax held from RSUs? I understand an ITIN and Form 1040-NR is required... Anything else such as Schedule OI, NEC, etc...? Also a UK employee with no USA links

Definitely yes to Schedule OI. Other than that, likely nothing else. With "no USA links" you probably have nothing that would go on Schedule NEC. ITIN application processing times are around 7-11 weeks. The IRS seems to be handling simpe 1040-NRs relatively quickly currently, perhaps 4-8 weeks. However, you cannot file until after around Feb the year following the withholding, so if you've paid unnecessary US tax in 2025 you won't see a refund until around March or April 2026 at the earliest.

Something to look at is why you ended up paying US tax on RSUs in the first place. As a nonresident alien, there shouldn't be any to pay; usually only (typically a discouragingly high rate of) UK tax and NI withholding. Did your provider request (or did you hand them) a W-8BEN? That should have neutered any general requirement for them to withhold US tax.

Beyond all this, of course, you then have to square all of this away with HMRC. Depending on timing, that might mean paying HMRC their slice well before getting any refund from the IRS. (Possible cash-flow issue there, then.)

Correct about W-8BEN, I was only told to do this after it was too late so I am having to reclaim!

I think everything is already square with HMRC. They knew about the income and have taken the necessary taxes at a rate of 47%

As for Schedule OI, do I need to claim tax exemption under a UK-U.S. income tax treaty (i.e question on Line L) OR do I not need to rely on a treaty because the income was foreign-source so there should have been no tax applied in the first place? 

EdSwippet

R42 said:

I think everything is already square with HMRC. They knew about the income and have taken the necessary taxes at a rate of 47%

So you paid both UK tax and NI at 47% and then another US withholding tax (30%?) on top for this RSU vesting? That would leave you little more than pocket money.

R42 said:
As for Schedule OI, do I need to claim tax exemption under a UK-U.S. income tax treaty (i.e question on Line L) OR do I not need to rely on a treaty because the income was foreign-source so there should have been no tax applied in the first place?

You can probably do this without treaty claim, but doing it with, since you have one, would make things crystal clear to the IRS, an organisation not exactly renowned for its flexible or intelligent approach to edge cases.

Following the "Simplified procedure" in the 1040-NR instructions should do the trick. The treaty clause you want is Article 14(1). Schedule OI line H will clearly indicate that you didn't reach the US "substantial presence test".