Withholding Tax Refund

[rayzzzz82]

Can I check if there is any withholding tax for dividend of US treasury bond ETF eg. SCHO? Or will the withholding tax be refunded via broker?

Does anyone have any experience on this? How does it work?

 

[sglandscape]

The broker should claim it back for you based on your declaration, and credit it back to you.

 

[rayzzzz82]

The broker should claim it back for you based on your declaration, and credit it back to you.

How to declare? Which broker can claim on behalf?

 

[sglandscape]

How to declare? Which broker can claim on behalf?

You had to complete the W-8BEN form already right?

 

[rayzzzz82]

You had to complete the W-8BEN form already right?

Yes. But I am not a resident of US. If I use moomoo and buy SCHO ETF (1-3 years Treasury bonds), will it refund the 30% withholding tax to my account automatically?

 

[limster]

Yes. But I am not a resident of US. If I use moomoo and buy SCHO ETF (1-3 years Treasury bonds), will it refund the 30% withholding tax to my account automatically?

MM/SSI become moomoo call centre.

what are the chances that you get an answer in this forum from someone who is (1) not a moomoo customer and (2) not actually vested in SCHO.

better to ask moomoo and post answer here for us to learn

 

[LWZ]

MM/SSI become moomoo call centre.

what are the chances that you get an answer in this forum from someone who is (1) not a moomoo customer and (2) not actually vested in SCHO.

better to ask moomoo and post answer here for us to learn

Thanks for answering on behalf of reddevil

 

[reddevil0728]

Thanks for answering on behalf of reddevil

Great minds I guess?

critical thinking. Rather than expect spoon feed lol

 

[rayzzzz82]

MM/SSI become moomoo call centre.

what are the chances that you get an answer in this forum from someone who is (1) not a moomoo customer and (2) not actually vested in SCHO.

better to ask moomoo and post answer here for us to learn

I just ask here if anyone has the same experience and would be kind to share their knowledge and as it is weekend, don't think the call center will be available to answer.

I would welcome replies even if they are not using moomoo and they are holding us bonds etf.

 

[peachmouse]

Moomoo noted this on their website:
Since US Treasury bonds are tax exempt at the state and local levels, the dividend payments of the US Treasury bond ETF TLT are also exempt from state and local income taxes. The taxes prepaid by brokers at the time of distribution will be fully or partially refunded in early next year after confirmation.

Source: https://www.moomoo.com/us/learn/det...tand-your-investment-returns-117024-240141094

 

[rayzzzz82]

Moomoo noted this on their website:
Since US Treasury bonds are tax exempt at the state and local levels, the dividend payments of the US Treasury bond ETF TLT are also exempt from state and local income taxes. The taxes prepaid by brokers at the time of distribution will be fully or partially refunded in early next year after confirmation.

Source: https://www.moomoo.com/us/learn/det...tand-your-investment-returns-117024-240141094

Thanks for checking this out. I have also found out this. But it does not mention about other bonds. So I was wondering about how the other brokers treat the withholding tax on dividend on other bond ETF which was supposed to be tax exempted.

Since quite a number adopted the bogle investing method, I suppose some might hold the bond ETF in their portfolio. May I ask how does the broker treat the refund (if any) for the bond ETF?

 

[sglandscape]

Great minds I guess?

critical thinking. Rather than expect spoon feed lol

The number of moomoo investors not likely to be great either

 

[sglandscape]

Thanks for checking this out. I have also found out this. But it does not mention about other bonds. So I was wondering about how the other brokers treat the withholding tax on dividend on other bond ETF which was supposed to be tax exempted.

Since quite a number adopted the bogle investing method, I suppose some might hold the bond ETF in their portfolio. May I ask how does the broker treat the refund (if any) for the bond ETF?

I believe the standard practice is refund in 1Q of the following year, provided your tax declaration is accurate and has not laspsed, otherwise withholded amount would continue to apply.

But, why trust the advice of a random stranger online

 

[rayzzzz82]

I believe the standard practice is refund in 1Q of the following year, provided your tax declaration is accurate and has not laspsed, otherwise withholded amount would continue to apply.

But, why trust the advice of a random stranger online

Thanks for the reply.

What must be included in the tax declaration for the refund to take place in the following year or is it automatic refund for non-american in the tax declaration?

As there are quite a number of brokers who treat the refund differently, so I am thinking to check first before opening an account with the broker or clarify with the broker afterward.

I have also checked online on the tax refund treatment and only moomoo website does provide some clarity on the refund for withholding tax for bond dividend, but it does only apply for TLT etf hence this is why I mention moomoo broker in my previous post.

Of course anyone can share their experience investing bond in other brokers. Since 30% withholding tax is quite substantial given the current high interest in bonds investment, if this is refund, that would be great!

 

[turtle2018]

Thanks for the reply.

What must be included in the tax declaration for the refund to take place in the following year or is it automatic refund for non-american in the tax declaration?

As there are quite a number of brokers who treat the refund differently, so I am thinking to check first before opening an account with the broker or clarify with the broker afterward.

I have also checked online on the tax refund treatment and only moomoo website does provide some clarity on the refund for withholding tax for bond dividend, but it does only apply for TLT etf hence this is why I mention moomoo broker in my previous post.

Of course anyone can share their experience investing bond in other brokers. Since 30% withholding tax is quite substantial given the current high interest in bonds investment, if this is refund, that would be great!

I (Singaporean, non-US Tax Resident) invested in TLT via IBKR (SG).
WHT for 2023 dividends: I received on 5 Feb 2024 via IBKR (SG)
I do not recall any separate declaration needed, other than the basic W8-Ben.

WHT for 2024 dividends: Have not received yet.

 

[rayzzzz82]

I (Singaporean, non-US Tax Resident) invested in TLT via IBKR (SG).
WHT for 2023 dividends: I received on 5 Feb 2024 via IBKR (SG)
I do not recall any separate declaration needed, other than the basic W8-Ben.

WHT for 2024 dividends: Have not received yet.

Thanks for sharing.

 

[CaptainWu]

Can I check if there is any withholding tax for dividend of US treasury bond ETF eg. SCHO? Or will the withholding tax be refunded via broker?

Does anyone have any experience on this? How does it work?

I hold TLT with Moomoo and they did the refund and credit back the WHT. I have the same counter at SCB also and this never happened and when I question them the answer was no. I then complaint to MAS asking for why different process for FI and MAS referred back to SCB, then SCB answered the below.

"Our bank does not offer tax advisory services or tax reclaim services. However, where possible for US source income reclassifications including that relating to US stocks held by you, we will request for a refund directly from the United States Internal Revenue Service (IRS) when we file our 2023 annual return in September 2024 as the tax has been remitted by our upstream custodian to the IRS and we do not receive refunds directly from the upstream custodian on any US source income reclassification. The IRS would generally take a minimum of 2 to 3 years to respond to our refund request"

I stopped using SCB for TLT thereafter as wasted of time asking them. 2-3 years who can track whether the refund going through....meaningless.

 

[rayzzzz82]

I hold TLT with Moomoo and they did the refund and credit back the WHT. I have the same counter at SCB also and this never happened and when I question them the answer was no. I then complaint to MAS asking for why different process for FI and MAS referred back to SCB, then SCB answered the below.

"Our bank does not offer tax advisory services or tax reclaim services. However, where possible for US source income reclassifications including that relating to US stocks held by you, we will request for a refund directly from the United States Internal Revenue Service (IRS) when we file our 2023 annual return in September 2024 as the tax has been remitted by our upstream custodian to the IRS and we do not receive refunds directly from the upstream custodian on any US source income reclassification. The IRS would generally take a minimum of 2 to 3 years to respond to our refund request"

I stopped using SCB for TLT thereafter as wasted of time asking them. 2-3 years who can track whether the refund going through....meaningless.

thanks for reply.

if you didn't check, you won't have known. considering that TLT annual dividend is around 4.7% currently, you would have a loss of 1.4% which amount to 14,000 USD if you invest 1m USD.

I wonder beside TLT etf, which other US treasury bonds ETF can seek refund?

 

[CaptainWu]

thanks for reply.

if you didn't check, you won't have known. considering that TLT annual dividend is around 4.7% currently, you would have a loss of 1.4% which amount to 14,000 USD if you invest 1m USD.

I wonder beside TLT etf, which other US treasury bonds ETF can seek refund?

Not sure but presume all the rest of Treasures one should be fine from TLT case. There are indeed brokers take sometimes to send back to you. I heard from one invested at DBS platform got refund only once a year.

 

[RedsYWNA]

Not sure but presume all the rest of Treasures one should be fine from TLT case. There are indeed brokers take sometimes to send back to you. I heard from one invested at DBS platform got refund only once a year.

IBKR refunds me once a year in early Feb, I recall.