Withholding tax in United States 2026

The US default withholding on passive income to foreigners is a blunt 30% — but the exceptions are the story: 0% on bank deposit interest, 0% on qualifying portfolio bond interest, and treaty rates of 15% or less on dividends for most investors.

US real estate is the enforcement zone: FIRPTA taxes foreigners' property gains and withholds at closing.

At a glance

top rate: 30% (default on dividends, royalties, rents)
entry band: 0% on bank interest and portfolio interest
tax year basis: Withheld at payment
filing deadline: Final for passive income — no return if correctly withheld
residency basis: US-source income of non-resident individuals
regime flag: W-8BEN certification unlocks treaty rates at source

Rates

Withholding on payments to non-resident individuals (2026)

Rate	Base	Applies to
30%	Gross	Dividends — typically 15% or less under treaties
0%	—	US bank deposit interest and qualifying portfolio bond interest
30%	Gross	Royalties, rents and other periodic income — treaty-reducible, often to 0%–10%
Graduated rates	Net income	US employment and business income (effectively connected) — taxed like residents' income
≈15%	Gross sale price	US real estate sold by a foreign owner (FIRPTA) — credited against the real gain on filing
37%	Partnership income share	Foreign partners' share of US business partnership income — non-final
25.5%	Gross benefit	US social security benefits paid to non-residents

Thresholds & allowances

Treaty network60+ income tax treaties
Claimed at source with Form W-8BEN; dividends usually 15%, interest and royalties often 0%
Short-visit exemptionUnder 90 days + under $3,000
Pay from a foreign employer for brief US work escapes US tax (treaties extend this to 183 days)

Residency

Residency trigger

These rules apply to non-resident individuals on US-source income; anything 'effectively connected' with a US trade or business shifts to graduated net-basis taxation with a required return.

Non-resident treatment

Correct final withholding on passive income ends the story — no US return needed. Wages are withheld through payroll and reconciled on the non-resident return form, due 15 April (15 June if no wage withholding).

Notes

Most non-resident investors in US stocks feel only the treaty dividend rate — capital gains on those same stocks are US-tax-free for them.
The 30% also nominally covers wages, but employment income is carved out into normal graduated taxation instead.
Backup withholding of 24% applies to US payees who fail to certify a taxpayer identification number — a residents' compliance tool, not a treaty matter.
States are not bound by federal treaties — state tax can apply even where a treaty zeroes the federal rate.

FAQ

What is the US withholding tax on dividends for foreigners?

30% by default, cut to 15% (often less) under most treaties via a W-8BEN form. Interest is friendlier: 0% on bank deposits and qualifying portfolio bonds.

What happens when a foreigner sells US real estate?

FIRPTA applies: the buyer withholds roughly 15% of the gross price at closing, and the seller files a US return to settle the actual capital gains tax and reclaim any excess — with statutory exceptions where the buyer will use the home: 0% at or under $300,000 and 10% between $300,001 and $1 million.

Figures: tax year 2026, compiled from public sources. Not tax advice.

See withholding tax in other countries

Full ranking →