NRA withholding applies only to payments made to a payee that is a foreign person. It does not apply to payments made to U.S. persons. Usually, you determine the payee's status as a U.S. or foreign person based on the documentation that person provides. However, if you have received no documentation or you cannot reliably associate all or a portion of a payment with documentation, then you must apply certain presumption rules. The “Identifying the Payee” section in Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, has a longer discussion of how to handle payments in these situations: When the payee is not the person you pay U.S. agent of a foreign person Disregarded entities Special Chapter 4 rules Flow-Through Entities Chapter 3 payees Chapter 4 payees Foreign partnerships Foreign simple and grantor trusts Fiscally transparent entities claiming treaty benefits Foreign Intermediaries Special rule for chapter 4 Nonqualified intermediaries (NQI) Qualified intermediaries (QI) Qualified derivatives dealers (QDDs) Branches of financial institutions QI agreement Documentation requirements Reporting requirements U.S. branches of foreign banks and foreign insurance companies Withholding foreign partnership and withholding foreign trust WP agreement and WT agreement Documentation Related NRA Withholding
