Tax from Interest Income from CD, as Non Resident

[mmubaswi]

Hello, 

             If a visitor has a US bank account, and interest income from C/D from the Bank, is he required to pay taxes as a non-resident? The bank already deducted the standard 30% from the interest income and sent the 1099-INT. Is he required to file a 1040-NR? 

[MarilynG1]

Banks do not usually deduct income tax on Interest Income they pay out to an account holder.  Was the 30% a Penalty they paid for closing their CD Account Early?  It it was indeed income tax, they could file a 1040-NR to get that refunded. 

The IRS does not require reporting/taxation of US Bank Interest for Non-Residents, unless it is connected with a US trade or business.

Here more Tax Tips for Resident and Non-Resident Aliens and Non-Taxable Interest for Non-Residents. 

[mmubaswi]

Hi, thank you for the reply, yes it was withheld as tax and that's why the 1099 was generated. He doesn't have an ITIIN.

[Critter-3]

He is not required to file a 1040NR but he may want to file one to get any excess withholding refunded.  An ITIN can be applied for  by filing an W-7  and attaching the return to it.