Form W-8 ECI, Certificate of Foreign Person’s Claim That Income Is Effectively Connected With a U.S. Trade or Business
Form W-8 ECI is how a foreign person tells a U.S. withholding agent that their income is effectively connected with a U.S. trade or business, so standard nonresident withholding does not apply. Complete it online and download the PDF for free.
This is the genuine IRS PDF, unmodified. Source: IRS official page.
What is W-8 ECI?
Form W-8 ECI is a certificate a foreign person gives to a withholding agent or payer, not to the IRS. It states that the payee is the beneficial owner of U.S. source income and that the income is effectively connected with the conduct of a trade or business in the United States. Effectively connected income is generally taxed on a net basis through a U.S. tax return rather than through flat-rate withholding on the gross payment.
With a valid W-8 ECI on file, the withholding agent can generally pay the income without the withholding that would otherwise apply to payments to foreign persons. The foreign person still has to report the income, typically on Form 1040-NR for individuals or Form 1120-F for foreign corporations. The certificate must list the items of income it covers and generally remains valid for a limited period, so check the current instructions at irs.gov.
Who files W-8 ECI?
- Foreign individuals or entities receiving U.S. source income that is effectively connected with their U.S. trade or business
- Foreign owners of U.S. rental real estate who have elected to treat the rental income as effectively connected income
- Foreign partners or businesses operating in the United States who want payers to stop applying flat-rate nonresident withholding to business income
- Any foreign beneficial owner asked by a U.S. withholding agent to document why effectively connected income treatment applies
How to fill out W-8 ECI
- Enter the beneficial owner’s name, country of organization or citizenship, and entity type in Part I.
- Provide both the permanent residence address and the U.S. business address, along with your U.S. taxpayer identification number, which is required on this form.
- Specify each item of income that is, or is expected to be, effectively connected with the conduct of a trade or business in the United States.
- Sign and date the certification, confirming you will file a U.S. tax return reporting the income, then download the completed PDF for free.
- Give the form to the withholding agent or payer that requested it. Do not send it to the IRS, and keep a copy for your records.
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Frequently asked questions
What is effectively connected income?
It is income connected with an active U.S. trade or business, such as business profits from U.S. operations. Unlike passive investment income paid to foreign persons, it is generally taxed on a net basis at graduated rates, and the foreign person reports it on a U.S. income tax return.
Do I need a U.S. taxpayer identification number for Form W-8 ECI?
Yes. Unlike some other W-8 forms, W-8 ECI requires a U.S. TIN, such as an SSN, ITIN, or EIN, because you are certifying that you will file a U.S. tax return to report the income.
How is W-8 ECI different from W-8BEN?
W-8BEN certifies foreign status and any treaty claim for income subject to withholding on a gross basis. W-8 ECI instead claims the income is effectively connected with a U.S. trade or business, so it is excluded from that withholding and reported on the foreign person’s own U.S. tax return.