We're required to collect a W-9 tax form or an equivalent from our customers. Customers can certify their tax status directly in the app. Certifying your tax status ensures we appropriately apply any necessary withholding.
We’re legally required to ensure that all Robinhood customers certify their tax status. For US persons, we are generally not required to withhold taxes on proceeds (this can include proceeds from sales, interest, and dividends). If you don’t certify your tax status, you may be subject to backup withholding. Certifying your tax status allows us to avoid unnecessary withholding.
You can certify your tax status from your Robinhood app—please make sure your app is up to date. If you need to make a change to your account before certifying your tax status, such as updating your legal name, please reach out to us at firstname.lastname@example.org.
A W-8BEN is a tax form certifying that an individual is a non-US person and a beneficial owner for US tax purposes. If you are a non-US person, we are required to withhold taxes of up to 30% from dividends and interest you receive. The W-8BEN will ask you to certify the foreign country to which you pay taxes, your residential address in that country, your international tax ID number, and whether or not you want to claim US tax treaty benefits to potentially reduce the amount of taxes that we are required to withhold from dividends and interest that you receive.
If you are submitting a W-8BEN, you will also need to submit a letter of explanation in the app, which provides information on the reason you reside in the US but are claiming to be a non-US person for tax purposes. A foreign passport will also need to be submitted. You can submit your W-8BEN and these documents in the app.
A W-9 is a tax form certifying an individual as a US person for US tax purposes. This form will ask you to certify your personal information like your name, address, and social security number. US persons should also report whether they have been instructed by the IRS that they are subject to backup withholding. If you’re a US person for tax purposes, you can submit your W-9 in the app.
To be considered a US person for tax purposes, you must:
If none of the above situations apply to you, you are considered a non-US person for tax purposes.
A non-US citizen will satisfy the permanent resident card test if they are a lawful permanent resident of the US for at least one day during the calendar year. If you have been issued a registration card (Form I-551), you likely meet the requirements for the permanent resident card test. If you're unsure of your residency status, we recommend consulting with a legal or tax advisor.
A non-U.S. citizen satisfies the substantial presence test if for the calendar year: (i) they are physically present in the U.S. for at least 31 days during the current year; and (ii) physically present in the U.S. for at least 183 days over the past 3 years, counting:
There are exceptions where days present in the U.S. do not count for purposes of the substantial presence test. Days present in the U.S. as an exempt individual do not count toward the substantial presence test. Common exempt individuals include the following:
Here are two examples to help determine if you meet this test. If you were physically present in the United States for 120 days for each year from 2019 - 2021, you would not pass the substantial presence test. Your days would be calculated as follows:
In this scenario, the total number of days you were present is 180 days, which falls just short of the 183 day requirement to pass the test.
If you were physically present in the United States as a student on a valid F-1 visa for 180 days each year from 2019-2021, you would not pass the substantial presence test. As a student on a valid “F” visa, you are considered an exempt individual and your days in the U.S. do not count for purposes of the substantial presence test.
We are generally required to withhold 30% from dividends and interest paid to you if you are a non-US person. This withholding tax will automatically be deducted from the dividend and interest payments you receive.
You may, however, be eligible for a reduced rate of US withholding tax if your country of permanent residence has an income tax treaty with the US. If you certify in the app that you are a tax resident of a country that has an applicable income tax treaty with the US, we will subject your payments of dividends and interest to the reduced rate of withholding tax provided in that treaty. If you do not see your country listed, then the US does not have an income tax treaty with your country and you will be subject to the general 30% withholding rate.
To submit your W-9 information within the Robinhood app:
To submit your W-8BEN information in your Robinhood app:
at this reduced rate. Tap No if you do not wish to opt in. 8. Select the reason you’re in the US 9. Review the W-8BEN 10. Tap Review 11. Tap Submit 12. Tap Done
If you don’t have an international address or an international tax ID, follow the on-screen prompts for further instructions.
If you aren’t considered a US person for tax purposes, don’t have an international tax ID or address, please send us an email at email@example.com for additional help.
Backup withholding is federal tax that financial institutions, like Robinhood, are required to withhold for individuals with the following situations:
1 - Certification Failure - The account holder does not provide their name and tax identification number and certify that the information is correct in the manner required by the IRS prior to receiving reportable payments including dividends, interest, and gross proceeds from sale transactions.
Robinhood requires customers to certify their tax information at account opening in order to avoid having to charge backup withholding. Robinhood will also notify customers if there is an issue with their certification that requires attention.
2 - B-Notice - The IRS identifies that the name and tax identification number (TIN) combination reported on a Form 1099 is not correct for a specific account and sends the payer a B-Notice. Upon receipt of a B-Notice from the IRS, Robinhood will notify the customer and request either a new W9 or other documentation such as a copy of a social security card in order to update the incorrect information. Backup withholding is required until the customer provides the additional certification or documentation.
3 - C-Notice - The taxpayer was notified by the IRS that they either underreported dividends and/or interest or failed to file a return where required. Robinhood can be notified of this issue by a customer in their W-9 certification or directly by the IRS (see ‘What is a C-Notice’ for more information).
Backup withholding is currently required to be withheld at a rate of 24%. Backup withholding will be reported on a 1099 Form as federal tax withheld. Once backup withholding starts , it cannot be reversed. However, providing your tax certification or additional documentation required after receiving a B-Notice or C-Notice will effectively stop and prevent future withholding. In addition, customers who are charged backup withholding can use the withheld amounts as a credit of federal income tax withheld on their tax return.
Robinhood does not provide tax advice. For specific questions, you should consult a tax professional.