W9 for banking

lfirst · 05-12-2015, 12:45 AM

Sorry, I know there have been some threads on this topic but I was worried so I wanted to get confirmation...

I'm trying to open an Ally checking account (they are online banking). I got a letter in the mail and it's a small piece of the W9. I have a SSN, EAD, DACA-approved and all that.

I know that I pass the substantial presence test for the IRS because I've been in the US continuously for two decades. Does that mean it's okay to sign the W9 even though it says:

I am a U.S. citizen or other U.S. person (including a U.S. resident alien)?

I am hoping to adjust my status soon so I just want to make sure I'm not doing anything bad that will affect it.

Thank you!

lfirst · 05-12-2015, 12:55 AM

Ok so I found this on the IRS website which seems pretty clear!

Quote:

Introduction to Residency Under U.S. Tax Law

The taxation of aliens by the United States is significantly affected by the residency status of such aliens.

Although the immigration laws of the United States refer to aliens as immigrants, nonimmigrants, and undocumented (illegal) aliens, the tax laws of the United States refer only to RESIDENT and NONRESIDENT ALIENS. In general, the controlling principle is that RESIDENT ALIENS are taxed in the same manner as U.S. citizens on their worldwide income, and NONRESIDENT ALIENS are taxed according to special rules contained in certain parts of the Internal Revenue Code (hereinafter referred to as the Code). A major distinguishing feature of this special tax regime concerns the source of income: a nonresident alien (with certain narrowly defined exceptions) is subject to federal income tax only on income which is derived from sources within the United States and/or income that is effectively connected with a U.S. trade or business.

The residency rules for tax purposes are found in I.R.C. § 7701(b). Although the tax residency rules are based on the immigration laws concerning immigrants and nonimmigrants, the rules define residency for tax purposes in a way that is very different from the immigration laws. Under the residency rules of the Code, any alien who is not a RESIDENT ALIEN is a NONRESIDENT ALIEN. An alien will become a RESIDENT ALIEN in one of three ways:

By being admitted to the United States as, or changing status to, a Lawful Permanent Resident under the immigration laws (the Green Card Test);
By passing the Substantial Presence Test (which is a numerical formula which measures days of presence in the United States); or
By making what is called the "First-Year Choice" (a numerical formula under which an alien may pass the Substantial Presence Test one year earlier than under the normal rules). Refer to the discussion of "First-Year Choice" in Chapter 1 of Publication 519, U.S. Tax Guide for Aliens

Under these rules, even an undocumented (illegal) alien under the immigration laws who passes the Substantial Presence Test will be treated for tax purposes as a RESIDENT ALIEN.

creativegemini · 05-12-2015, 10:22 AM

W9? That's what my clients provide me when I take on freelance work. It's a SSN request form. Section III is where there's a point about residency. As a sole proprietor of my businesses I've never had an issue since I have a legit SSN and EAD. Interesting a bank is asking for a W9.

You will be fine. I opened an account with BofA in 2011 before DACA with no issue and updated my info with them after DACA.

iedgar10 · 05-12-2015, 11:30 AM

Creativegemini is right. Clients request a w9 from our company whenever it's big ticket items. It's just for tax reporting purposes- to prove who they give money to...a paper trail.

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W9 for banking