A nonresident alien with interest bearing account had interest withheld in error. Please advise how to claim with IRS a refund for wrongful withheld interest.This is only us source of income and no prior tax return was required to be filed.

From the US Internal Revenue Service web site:

Tax Topics - Topic 307 Backup Withholding (http://www.irs.gov/taxtopics/tc307.html)

"Under the backup withholding rules, the business or bank must withhold on a payment if:

1. You have not given the payer your taxpayer identification number in the required manner, "

"Payers who withhold income tax under the backup withholding rules must show the tax withheld on a Form 1099. The payer must send you this form by January 31."

"You should report the amount of tax withheld in the payment section on your Form 1040 (PDF), Form 1040A (PDF) or . More detailed information on the backup withholding rules and procedures for payers can be found in Publication 1281 (PDF)."


Individual Taxpayer Identification Number (ITIN) (http://www.irs.gov/individuals/article/0,,id=96287,00.html)

"An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service."

"A non-resident alien individual not eligible for an SSN, who is required to file a U.S. tax return only to claim a refund of tax under the provisions of a U.S. tax treaty, needs an ITIN."

Thank you for your response. However, since the tax treaty exempts interest income from U.S taxation no tax return was required. The issue is the bank erred by withholding even though proper paper work was submitted. Bank admitted error and said to file for a refund from the IRS. They gave copies of the 1042. My query is what form to use file for a refund.

I think you need to file a form 1040, which will show that no tax was due by the tax payer, yet given the payment that was incorrectly made on your behalf by the bank, you are now due a refund.

Agree in principle! However, file Form 1040NR to get the withheld taxes refunded.