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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15590
Experience:  15years with H & R Block. Divisional leader, Instructor
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I am not a US citizen and have never lived in the US but have

Customer Question

I am not a US citizen and have never lived in the US but have been working in Africa for a US organization. I have no social security number but my salary is paid through a US bank account. I am on the company's retirement plan 403 (b). I am leaving the org and I want to claim my pension as lump sum? I am 56 years old. Will I pay tax on this money? If so can I claim back?
Submitted: 5 years ago.
Category: Tax
Expert:  Robin D. replied 5 years ago.

Hello and thank you for using Just Answer.

Non US persons are taxed on pension amounts that are distributed to them from US sources. You will be asked to sign a W8 at the time you request a distribution from the account. This will give you an exclusion from the withholding or lessen the amount that is required to be withheld if there is a tax treaty between the US and your resident country. There is no tax treaty with Ghana.

You will need to obtain an Individual Taxpayer Identification Number so you can file a 1040NR tax return to the US for the year of the distribution and withholding (which will be at 30% rate). You will be able to claim any amount that is withhold over the true tax rate as a refund. IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain a Social Security Number (SSN) from the Social Security Administration (SSA).

Use the latest revision of Form W-7, Application for IRS Individual Taxpayer Identification Number to apply. Attach a valid federal income tax return, unless you qualify for an exception, and include your original, notarized, or certified proof of identity and foreign status documents.
Because you are filing your tax return as an attachment to your ITIN application, you should not mail your return to the address listed in the Form 1040, 1040A or 1040EZ instructions. Instead, send your return, Form W-7 and proof of identity and foreign status documents to:

Internal Revenue Service
Austin Service Center
ITIN Operation
P.O. Box 149342
Austin, TXNNN-NN-NNNN/p>