[i3wangyi]

Hi I'm working for a US tech company and the company vests stocks to employees yearly basis. I was from other country and new to the E*trade system, thus when registering somehow I mistyped my address not in US and no W-9 form was submitted.
But actually I'm working in US and should be subject to US tax (which I didn't notice when filling information at first). Recently I sold my employee stocks and until then I found I need to submit a W-9 form to change the tax status to domestic.

And the result is there's something called back-up withholding by the IRS, and they took about 30% of the stocks off for penalty purpose. For this case, can I request the refund from IRS, and re-apply my appropriate tax?

Thanks!

[AtlantaTaxExpert]

If you are on a work visa and are still here in the U.S. then the sale of the stock IS taxable. The back withholding is not a penalty, but rather a requirement to ensure that the required taxes are paid.

You can request a refund by filing Form 1040 with Form 8948 and Schedule D to report the stock sale, calculate the gain (either long-term or short-term) and calculate the appropriate tax, which likely is NOT 30%.

If you are on a J or F visa and are considered to be a non-resident alien, you still have to file Form 8949 and Schedule D, but with Form 1040NR. The same capital gain and tax calculations are needed.