Query regarding USC/PRSI/Income Tax from Dividend (US)

[BigPineapple]

Hi, just doing my first dividend filing for 2020 (from US stock). I am PAYE with unearned income less than 5K per year. I understand that after the withholding tax aspect is sorted in Form 12 in terms of filling in figures into the form, I'd be liable for USC/PRSI/Income tax. I know PRSI is exempted where unearned income is less than 5K.

My question is, do I need to enter the remaining USC and Income tax figure somewhere else in Form 12?? or is it automatically taken into account by Revenue system from the Gross (US dividend) or Net (Irish dividend) that I would have populated in the withholding tax section??

I just want to get some clarity before I make a mistake. Thanks.

 

[relax carry on]

Hi, just doing my first dividend filing for 2020 (from US stock). I am PAYE with unearned income less than 5K per year. I understand that after the withholding tax aspect is sorted in Form 12 in terms of filling in figures into the form, I'd be liable for USC/PRSI/Income tax. I know PRSI is exempted where unearned income is less than 5K.

My question is, do I need to enter the remaining USC and Income tax figure somewhere else in Form 12?? or is it automatically taken into account by Revenue system from the Gross (US dividend) or Net (Irish dividend) that I would have populated in the withholding tax section??

I just want to get some clarity before I make a mistake. Thanks.

You fill in the gross US dividend figure on your tax return via your Revenue myaccount in the us dividends section and then just complete. The system will generate a statement of liability showing whatever tax and USC is due. The system also gives you a credit for 15% tax withheld by the IRS when deciding what tax and USC is due. You do not fill in any box to claim relief for the US tax withheld.

 

[BigPineapple]

Thank you..

Another follow up question.. has anyone ever come across where there is no withholding tax taken by the brokerage/IRS? I was working out the figures yesterday based on the dividend received into the bank account for each quarters as publish by the company and the amount received from the broker is the same (Broker is Fidelity, through work - US multi national). I have the W8-BEN filled previously but not sure why it wasn't taken.

This is unusual as far as I can tell and I probably have to ring revenue to see how do I pay it since the revenue form takes the gross figure and doesn't allow user to input the withholding tax.. it is certainly different from the likes of T212 where they do deduct the withholding tax automatically.

 

[Jordan Belfort]

Thank you..

Another follow up question.. has anyone ever come across where there is no withholding tax taken by the brokerage/IRS? I was working out the figures yesterday based on the dividend received into the bank account for each quarters as publish by the company and the amount received from the broker is the same (Broker is Fidelity, through work - US multi national). I have the W8-BEN filled previously but not sure why it wasn't taken.

This is unusual as far as I can tell and I probably have to ring revenue to see how do I pay it since the revenue form takes the gross figure and doesn't allow user to input the withholding tax.. it is certainly different from the likes of T212 where they do deduct the withholding tax automatically.

My experience is that if there's no valid W8-BEN on file the broker withholds full 30% in US but Revenue only gives you credit for assumed 15% withheld......If you have a valid W8-BEN the broker withholds 15% and Revenue give credit for 15% so that you get full credit for tax paid in the US

 

[BigPineapple]

My experience is that if there's no valid W8-BEN on file the broker withholds full 30% in US but Revenue only gives you credit for assumed 15% withheld......If you have a valid W8-BEN the broker withholds 15% and Revenue give credit for 15% so that you get full credit for tax paid in the US

Yeah that was my understanding too.. Just really strange Fidelity didn't take anything away, not the 15% or 30%..

I better call Revenue and ask how to pay it in this case I think

 

[basilbrush]

I don't think it has anything to do with Revenue, so in my opinion you are unlikely to get any help from them. It is to the IRS that you need to pay the tax. It seems to me that you either need to contact Fidelity and get them to deduct the 15% tax, or you will need to file a US foreign person tax form yourself for the year and pay the 15% tax to the IRS.

 

[AAAContributor]

I better call Revenue and ask how to pay it in this case I think

I don't think it has anything to do with Revenue, so in my opinion you are unlikely to get any help from them. It is to the IRS that you need to pay the tax. It seems to me that you either need to contact Fidelity and get them to deduct the 15% tax

I agree with the above approach advocated by @basilbrush

The corporate actions department of Fidelity need to be contacted first on the matter before taking things further. You're wasting your own time and that of Revenue otherwise.

Have you enquired with any work colleagues that have also received the most recent dividend on the company shares to see if they have the same issue?

 

[clinteastwood]

I agree with the above approach advocated by @basilbrush

The corporate actions department of Fidelity need to be contacted first on the matter before taking things further. You're wasting your own time and that of Revenue otherwise.

Have you enquired with any work colleagues that have also received the most recent dividend on the company shares to see if they have the same issue?

Nice common sense answer by AAA, rather than 'er I contact Revenue'...rem the tax system is self-assessed !