Where to Park $USD in Canada post Covid | Page 2 | General financial discussion | Discussion forum

Loonie said
When I lived in the US as a student for several years, I too ran into that issue with the withholding tax, but, being a student, my bank account wasn't that flush and the interest was very little so I didn't do anything about it.
However, I recall that they told me there was a certain form that could be filled out to avoid the withholding tax for a foreigner.…

If one lives in the US, then one is a resident alien and not a non-resident alien.

A resident alien would use Form W-9 to obtain a Taxpayer Identification Number (TIN). The alien would then file US tax returns like a resident US citizen.

Financial institution would stop withholding tax on interest once it receives a social security number or TIN from someone who resides in the US.

I don't know if it is because of the Canada-US tax treaty that your US bank interest would not be taxed in the US.

I think the US bank interest would not be because of the personal exemptions you would then be able to claim on your US tax return being a US resident.

I only saw Article XX (Students) in the treaty which exempts students from US taxation of income student receives from outside the US for "his maintenance, education or training."

On second look, Form W-9 just supplies the SSN or TIN to the financial institution. To obtain the TIN, one would have to apply to the IRS with Form W-7.