[GabrielAskme]

I have a variable annuity,non-qualified because the contribution was after tax money or money that was not taxable
If I leave The USA and become a non resident for tax purposses and later take an early or lump sum distribution, I would not be taxed at all because Non residents are only taxed on their trade or business in the US. Am I correct?
Also, would the company be required to withhold any amount to send to IRS?
Thank you so much,

Gabriel

[AtlantaTaxExpert]

Gabriel:

If the variable annuity is funded with AFTER-tax dollars, then you would owe taxes ONLY on any profit or capital gains earned by the investments within the annuity.

If you are outisde of the U.S. when you requested the distribution, and a Form W-8BEN is NOT on file, then the annutiy company would probably withhold 30% to cover any potential tax liability, and you would have to file Form 1040NR to request a refund.

[GabrielAskme]

Thank you very much..! But then I am correct in thinking that, as a NonUS resident for tax purposses, those earnings within the annuity would not be taxable.. right?

[AtlantaTaxExpert]

Yes, that IS my interpretation of general U.S. tax law.

The tax treaty between your country and the U.S. may have differing guidance, so you should review the treaty if one exists.