Form 8813: Partnership Withholding Tax Payment Voucher (Section 1446)
Complete guide to Form 8813 for foreign partners in US partnerships and for partnerships with foreign partners. Learn the Section 1446 withholding rules and how to avoid penalties.
Form 8813 is the payment voucher that US partnerships use to remit withholding tax on behalf of their foreign partners. If you are a foreign partner in a US partnership — or if you are a US expat who co-owns a foreign partnership with US partners — Section 1446 withholding rules may affect you. This guide explains who must withhold, how much, and when.
What Is Section 1446 Withholding?
Section 1446 requires US partnerships to withhold tax on the effectively connected taxable income (ECTI) that is allocable to foreign partners.
Key Concepts
- Partnership: Any US entity classified as a partnership for tax purposes (including LLCs with multiple members that have not elected corporate status)
- Foreign partner: Any partner that is not a US person (non-resident alien, foreign corporation, foreign partnership, foreign trust, foreign estate)
- Effectively connected taxable income (ECTI): Income that is effectively connected with the conduct of a US trade or business
- Withholding agent: The partnership itself, which is responsible for withholding and remitting tax
Who Must File Form 8813?
Partnerships With Foreign Partners
Any US partnership that has one or more foreign partners and that has ECTI must:
- Calculate each foreign partner's share of ECTI
- Withhold tax at the applicable rate (37% for individuals, 21% for corporations)
- Remit the withheld tax to the IRS using Form 8813
Foreign Partners
Foreign partners do not file Form 8813. However, they:
- Receive Form 8805 (Foreign Partner's Information Statement of Section 1446 Withholding Tax) from the partnership
- Report their share of ECTI on their US tax return (Form 1040-NR for individuals, Form 1120-F for corporations)
- Claim a credit for tax withheld by the partnership
Withholding Rates
| Partner Type | Default Rate | Notes |
|---|---|---|
| Non-resident alien individual | 37% | Highest individual marginal rate |
| Foreign corporation | 21% | Corporate rate |
| Foreign partnership | 37% (or partnership rate) | Look-through to ultimate partners |
| Foreign trust/estate | 37% | Rate depends on beneficiary |
Treaty Reductions
Some tax treaties reduce the withholding rate on partnership income. To claim treaty benefits:
- The foreign partner must provide a valid Form W-8BEN
- The partnership must apply the treaty rate
- The partnership must file Form 8833 to disclose the treaty position
Form W-8ECI Exception
If a foreign partner certifies that their share of partnership income is effectively connected with a US trade or business and that they will file a US tax return, the partnership may be exempt from withholding. The foreign partner must provide Form W-8ECI.
Quarterly Payment Schedule
Partnership withholding tax is paid quarterly:
| Quarter | Period Covered | Due Date |
|---|---|---|
| Q1 | January 1 - March 31 | April 15 |
| Q2 | April 1 - May 31 | June 15 |
| Q3 | June 1 - August 31 | September 15 |
| Q4 | September 1 - December 31 | December 15 |
Note: Q2 is a short period (April-May) because the partnership's annual return (Form 1065) is due September 15, and the withholding must be fully paid by then.
How to Pay
- Complete Form 8813
- Write a check or make an electronic payment (EFTPS)
- Mail to the IRS address on the form, or pay electronically
Penalties for Non-Compliance
Partnership Penalties
- Failure to withhold: The partnership is liable for the tax that should have been withheld, plus interest
- Failure to file Form 8813: Penalties may apply for late or missing payments
- Under-withholding: The partnership must pay the shortfall plus penalties
Safe Harbor
A partnership may avoid penalties if it can demonstrate reasonable cause for the failure to withhold. This is difficult and requires documentation.
Special Situations
Foreign Partnerships With US Partners
If you are a US expat who is a partner in a foreign partnership:
- Section 1446 does not apply to you (you are a US partner)
- However, you may have other reporting obligations (Form 8865, Foreign Partnership Return)
- The foreign partnership may have US tax obligations if it conducts business in the US
LLCs Treated as Partnerships
Multi-member LLCs that have not elected corporate status are treated as partnerships by default. If a US LLC has foreign members:
- The LLC must comply with Section 1446 withholding
- The LLC must file Form 8813 quarterly
- The LLC must issue Form 8805 to foreign members
Publicly Traded Partnerships (PTPs)
Publicly traded partnerships have special withholding rules under Section 1446. Foreign partners in PTPs are subject to withholding on their distributive share of ECTI, and the PTP must comply with quarterly withholding and reporting.
When to Get Help
You should consult a specialist if:
- You are a foreign partner in a US partnership
- You are a US expat with ownership in a foreign partnership
- Your US LLC has foreign members
- You need to understand Section 1446 withholding obligations
- You have received Form 8805 and need to file a US tax return
FileAbroad's Complex Expat Return includes partnership withholding analysis, Section 1446 compliance, and foreign partner tax planning. Start your free intake to discuss your situation.
Frequently Asked Questions
Who must file Form 8813?
Form 8813 is filed by US partnerships (or US entities treated as partnerships) that have foreign partners. The partnership must withhold tax on the effectively connected taxable income (ECTI) allocable to foreign partners and remit it to the IRS using Form 8813 as a payment voucher.
What is the withholding rate under Section 1446?
The default withholding rate on effectively connected taxable income allocable to foreign partners is the highest marginal tax rate applicable to the partner. For individual foreign partners, this is 37% (federal). For corporate foreign partners, it is 21%. The partnership must withhold and remit this amount quarterly.
Does Section 1446 apply to all foreign partners?
No. Section 1446 withholding applies only to foreign partners (non-resident aliens, foreign corporations, foreign partnerships, foreign trusts, foreign estates). US partners are not subject to Section 1446 withholding. Additionally, certain foreign partners may be exempt if they provide a valid Form W-8ECI certifying that the income is effectively connected and they will file a US return.
When are Form 8813 payments due?
Partnership withholding tax under Section 1446 is paid quarterly using Form 8813. The due dates are April 15, June 15, September 15, and December 15. If the due date falls on a weekend or holiday, the payment is due the next business day. Late payments are subject to interest and penalties.
What if a partnership fails to withhold under Section 1446?
If a partnership fails to withhold or under-withholds on a foreign partner's share of ECTI, the partnership (not the foreign partner) is liable for the underpaid tax, plus interest and penalties. The partnership may also be required to pay a penalty equal to the amount of tax that should have been withheld. In severe cases, the partnership may lose its ability to continue business.