The Internal Revenue Service is changing the procedures for the tax withholding program used by foreign entertainers and athletes who want to work in the U.S.
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A Central Withholding Agreement is a tool that can help nonresident entertainers and athletes who plan to work in the U.S. A CWA provides for a reduced amount of tax withholding that is more in line with the nonresident's annual projected tax liability by allowing withholding based upon net income at graduated rates.
The IRS will consider entering into a CWA provided that all CWA program requirements are met. Accurately completing and timely submitting a CWA application will fulfill the requirements for consideration.
The IRS said in an email to tax professionals Friday that effective Oct. 1, all CWA applications must be faxed to (630) 493-5906 or mailed to the following address:.
Central Withholding Agreement Program
Mail Stop: 1441
2001 Butterfield Rd.
Downers Grove, IL 60515-1050
Effective Jan. 1, 2013, requests for a CWA must be received by the IRS at least 45 days prior to the first event to be covered by the CWA. Requests received less than 45 days prior will not be processed and such events will be subject to withholding at 30 percent of gross income as required under IRC 1441.
To help clarify the process for nonresident aliens, the IRS said it has confirmed with the Social Security Administration that nonresident aliens may apply for a Social Security Number immediately upon entering the USA and do not need to wait 10 days. In addition, it has been confirmed that the mailing address for the nonresident alien may be a U.S. post office box or the address of a designated power of attorney.
Requests for a Central Withholding Agreement must contain the information outlined in Form 13930 Instructions on how to apply for a Central Withholding Agreement.
For further information about the CWA program and the SSN application process, access the Central Withholding Agreements page on IRS.gov.